Disdain For The Federal Reserve Interest Rate Cuts
How can so many people be excited about the latest fed cut? You know, the one that lowered the federal funds rate 0.75 percent? Sure, this helps banks borrow money at a cheaper rate. It allows banks, if they choose, to pass on the savings in the form of lower interest loans. But it does nothing for me, the person trying to save money for a home.
While my money sits in a high-yield savings account, the interest I make on it keeps going down. If this trend continues, I’m not sure the account will qualify as so-called “high yield” if there’s another rate cut. Everywhere I turn for news, I read that people are worried about inflation–which, to me, seems to be a legitimate worry. The cost of gas, utilities and food continues to rise — there’s no doubt about that. And in turn people are reeling in their discretionary spending and focusing on putting gas in their cars and food on their tables. Yet the Fed continues to cut rates and increase the money supply.
I understand what the Fed is trying to achieve by lowering the federal funds rate, but I don’t necessarily agree with it. These actions seem to encourage companies to continue the risky behavior that got them in this mess in the first place. I believe it sends an entirely wrong message: “Go ahead and do what you want — we’ll bail you out again.”
I’m most peeved that the government seems to have turned their backs on those that have been responsible with their money. Why should I have to pay for the foolish decisions made by others? I think the economic landscape will get a lot worse before it gets better. My guess is that the credit card industry is next in line for problems, i.e. more people will begin using credit cards to make monthly payments just to keep their heads above water for a little while longer.
Why You Shouldn’t Depend On Someone Else To Make Your Investing Decisions
You should always do your own research when you invest in the market. Never trust a TV personality to tell you what you should do with your money.
Economic Stimulus Plan Approved By Congress…$600 To $1200 Checks To Be Sent
About 116 million families will receive tax rebate checks.
The United States Congress and White House reached a deal today to distribute tax rebate checks. The checks will range from $600 to $1200 - those with children will receive a bit more.
The eligibility requirements to receive a check are:
Those who earn up to $75,000 individually or up to $150,000 as a couple will be eligible for the payments - CNN
Check amounts explained:
Individuals who pay income taxes would get up to $600, working couples $1,200 and those with children an additional $300 per child under the agreement. Workers who make at least $3,000 but don’t pay taxes would get $300 rebates. - Yahoo Finance
Also in this package is $50 billion in tax cuts for businesses. While the tax cuts for businesses start immediately, Congress hopes to have the tax rebate checks in people’s mailboxes by June.
Now that this plan has been approved, what do you plan to do with your rebate check?
Fed Lowers Interest Rates To 3.5 Percent
Ahead of Wall Street’s opening today, the Fed reduced interest rates 0.75% to 3.5%. The rate reduction came ahead of it’s next scheduled meeting on January 28.
This is a large reduction which might help settle the markets a bit. Early reports (based on futures) this morning had the market dropping 500 points. Only time will tell if investors take this as good or bad news.
What do you think? Is this what the markets and the economy need?
Will A Stimulus Package Help Revive The Economy?
So it appears that President Bush will layout a plan to put some life back into the economy. Early reports indicate that the plan will pump $100 - $150 billion into the economy through tax rebates. With single filers getting rebates of up to $800 and married filers getting up to $1600.
What do you think?
Thanks for taking part in this poll.
-
-
About
Just Squeaking By is a blog about my personal finances and my quest to get them in order. Read more about Just Squeaking By
-
-
Blogroll