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The Federal Reserve cut the federal funds rate in July 2019 for the first time since...

The Federal Reserve cut the federal funds rate in July 2019 for the first time since 2008. Though it's important, it doesn't mean the interest rate on your car loan will be lower tomorrow. Check out the article from the New York Times that explains how common interest rates for consumers will be affected by the Fed's action: Which of these will likely affect you the most? Will you benefit from the rate cut? Or will you be hurt by the rate cut? Explain. (NOTE: Avoid sharing intimate details of your finances. This should be a general discussion)

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Answer #1

Rate cut will directly affect customers as banks pass on to customers after some delays. Hence customer now get lower returns on savings and deposits while gettter better deal on loans as interest rates drop. Moreover investment made into debt instruments will yiled lower returns. And availability of credit will be higher for retail buyers.

Thus, overall net impact is marginal.

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