Quote:
Federal Reserve interest rate cuts drop the dollar once again
The decision of Ben Bernanke, the chairman of the U.S. Federal Reserve Board, on Wednesday to lower interest rates by another 0.5% after the surprise cut of 0.75% only a week earlier, has led the dollar to fall even further against the shekel and other major currencies.
The greenback fell 0.6% against the shekel yesterday and the representative exchange rate was set at NIS 3.625 - the lowest rate in a decade.
After the representative rate was fixed, the dollar continued to weaken in late trading.
Advertisement
The dollar is now down 5.7% since the start of 2008, and off almost 10% percent since its slight recovery in the middle of December.
According to forecasts, the dollar will continue losing ground against the shekel as the Bank of Israel Governor Stanley Fischer, is not expected to lower Israeli interest rates in the near future due to forecasts of lower inflation. Dollar interest rates are now 3.5%, well below the Bank of Israel's 4.25% level; as well as that of most major currencies.
Those hurt the most from the dollar's weakness are companies which export to dollar bloc countries, and other firms whose income is fixed in dollars. Of course, there are those profiting from the fall of the American currency, such as importers who buy their goods in dollars.
[url]http://www.haaretz.com/hasen/spages/950217.html[/url]
Quote:
Federal Reserve Bank announces drop in prime rate
Decrease will give relief to those having trouble
CARBONDALE, Ill. (AP) - Although money does not grow on trees, a recent drop in lending rates could make it easier to come by.
Last week the Federal Reserve Bank announced a half-percent drop in a key interest rate, referred to as the prime rate.
The lower rate applies more to home equity and commercial loans than auto and mortgage loans, but could also affect private student loans. One downside to the change is the possible increase in prices of daily goods.
Akm Morshed, assistant professor of economics at Southern Illinois University, said the lower rate helps people who had problems affording loans.
"The interest rate will be going down a little bit so the people who had a hard time repaying loans will get some relief there," Morshed said. "So basically it's the cost of money going down."
Steve Schauwecker, senior lender for First Southern Bank in Carbondale, said the rate would mostly affect people looking to refinance their home.
"Anybody who has taken out a home loan previously, and they've been waiting for the rate to drop to refinance, it stirs up a lot of interest in that market," Schauwecker said. "It can also affect the purchase market but it's not quite as discernible."
Although home purchase loan rates are not directly tied to the prime rate, Schauwecker said they did experience a small drop last week.
"After the prime dropped, home loan rates went down about an eighth of a percent," he said.
SIUC students who need student loans could find that private loans have also dropped now.
Billie Jo Hamilton, director of financial aid at SIUC, said the federal student loans are not affected by the cut of the interest rate.
"The federal student loans that most students have are tied to the T-Bill, not the fed lending rate," she said. "The federal government sets the rates for student loans each July 1 for the upcoming year."
Loans through private banks and lenders could be tied to the prime rate plus a certain percentage," Hamilton said.
"A lot of those lenders do base their rates on prime, so I'm assuming there could be some immediate relief for some people who have prime-based loans," she said.
There could be an effect on the federal loans, but it would not be seen until next year because this year's rate is already set, Hamilton said. Although more money in people's pockets seems positive, Morshed said it could cause prices to rise over the next few months.
"If they keep the interest rate low, in six months down the road we'll have higher prices," he said.
[url]http://media.www.dailyvidette.com/media/storage/paper420/news/2007/09/27/Features/Federal.Reserve.Bank.Announces.Drop.In.Prime.Rate-2994487.shtml[/url]
Quote:
Dear ANTHONY,
We are writing to inform you that based on the recent drop by the Federal Reserve, HSBC Direct has adjusted your Online Savings Account rate to 3.55% APY*. At 8x the national savings average**, you are still earning one of America’s highest savings rates.
HSBC Direct will continue to evaluate and respond to market changes so we can provide you with competitive rates. And if your rate changes, whether up or down, we are committed to always letting you know.
My interest rate has dropped from slowly 5.05% when I signed up for HSBC back in 2006, to about 4.75%...then in just the past few 