What do lower interest rates mean for consumers?
CAPE GIRARDEAU, Mo. (KFVS) - The Federal Reserve lowered interest rates again on Wednesday, September 18 after cutting them once already in July. The rate is now between 1.75 and 2 percent. But what exactly does that mean for you?
“It’s a very important thing to think about because it can affect their buying power,” said Terri Penrod, a real estate agent in Cape Girardeau, Missouri.
She said right now is a good time to make a big purchase like buying a house.
“With the interest rates being what they are it is just smarter to buy than to rent you know you might as well be making your own house payment and getting your own home equity versus doing it for someone else,” said Penrod.
“Those purchases also go back into the economy drive jobs drive growth overall,” said Aaron Panton, Regional Bank President at the Bank of Missouri.
He said overall lower interest rates are a good thing.
“As rates decrease consumers typically spend more on larger purchases such as autos, homes at a lesser rate which equates to more money in their pocket,” said Panton.
He said there are also negatives to lower interest rates.
“Those that are not in a borrowing situation where they may be at a retirement age that are dependent on interest rates or savings those rate equate to lower interest earnings and they typically spend less so there is always two sides to the coin,” said Panton.
Panton said with interest rates lowering its a good time to take a close look at your finances.
“I think it’s really important to look at your portfolio, your debt portfolio, your home loan, your auto loan and then consult with a banker i think its times like these where having a conversation with whoever it is that you bank with to determine whether or not there is an opportunity to save some money and do a refinance or just a restructure,” said Panton.
President Trump tweeted Wednesday in part, “Jay Powell and the Federal Reserve fail again. No guts no sense no vision.”
The President tweeted last week he wanted to see interest rates at or below zero.
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