Federal Reserve cut short-term interest rates

The Federal Reserve has cut short-term interest rates again. The goals of this action are to encourage consumers to borrow, but even more important, to induce banks to lend.

The cut in the federal funds rate is aimed at stimulating demand among consumers and businesses. The lower federal funds rate means that the prime rate will fall a quarter point, to 7.25 percent. Consumer interest rates based on the prime rate -- mainly home equity lines of credit and most variable-rate credit cards -- will fall a quarter-point in coming weeks.

www.843Realtor.com