Fed rate cut expected to bring 'real benefits' to Virginia borrowers
"Anyone who's looking for borrow money should take this as a good move today," Whitehurst, president and CEO of the
He said that's true for businesses, too, as they look to make investments and financing for big projects.
"There are going to be a lot of real-time benefits for borrowers, both consumers and businesses," he said.
Many people already may be seeing some of those benefits, as home mortgage rates have fallen by a percentage point or more in recent months in anticipation of the Fed lowering rates for the first time in more than two years as it tries to lower the rate of inflation without tipping the economy into recession.
"People have the misconception that rates weren't going down until the Fed did something — that isn't necessarily true,"
Price sees mortgage rates, now hovering in the 6% range, dropping closer to 5%, which he said not only could help prospective homebuyers, but also sellers who haven't been willing to put their homes on the market and buy a new one with a higher interest rate.
"Hopefully, this will get people off the sidelines," he said.
People with variable mortgage rates and home equity lines of credit — and some business loans — will see an immediate benefit because their interest rates are tied directly to the Fed's funding rate.
It also could lower the interest rates on credit cards, but economist
"Will [a reduction of] 50 basis points make a difference for consumer loans and credit? Not really," Engelke, chief economic strategist and managing director at
But reducing the cost of one part of the family budget could help those businesses that depend on discretionary spending for travel, said
"People who have high credit card balances may get a little bit of relief," Terry told the
If part of a household's costs go down, he added, "travel probably improves a little bit."
One Virginian who wasn't impressed was Gov.
Youngkin, who is campaigning for former President
"After three years of unprecedented inflation and rising rates, this 50-basis-point cut reflects real concerns about job growth, which has been my focus throughout our entire administration," he said in a prepared statement to the
Youngkin also told
"The bottom line is the economy is the top issue, by far," he said.
"
Engelke, at
Whitehurst, at the bankers association, said the Fed action sent a clear message about the shift of its priorities from inflation to jobs. "
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