Print this page

Fed Lowers and Banks Raise?

Written by Posted On Monday, 25 February 2008 16:00

Question: Is is true that when the Federal Reserve lowers their rate that banks raise their interest levels? Answer: No. The Federal Reserve sets the "discount" and "federal funds" rates, rates which impact the cost of borrowing for banks. When the Fed raises rates then banks raise their prime rates, when the Fed lowers the discount and federal funds rate then the prime rate and other rates decline. The exception is credit card rates, which are routinely unrelated to any understandable measure or cost.

Read 1200 times
Rate this item
(0 votes)
Realty Times Staff

Latest from Realty Times Staff

Joomla! Debug Console

Session

Profile Information

Memory Usage

Database Queries