interest rates: Doesn't The Fed Control Interest Rates? - 11/03/08 08:52 AM
Doesn't The Fed Control Interest Rates?by Pam SimpsonThe Kudzu Vine
Days before the Federal Reserve plans to meet, the media starts reporting on anticipated rate cuts or rate hikes.  This contributes to the misconception that a Fed rate cut means mortgage interest rates will go down in the same amount as the rate cut.  BUT, it doesn't work that way.
The interest rate that the Fed directly controls IS NOT the mortgage interest rate.  The Fed controls the Federal Funds rate and the discount rate.  So, okay...what are those?
The Federal Funds rate is the interest rate that banks charge each other … (4 comments)

 
Pam Simpson, GRI, Broker-Assoc. (Bob Leigh & Assoc., LLC) Rainmaker large

Pam Simpson

GRI, Broker-Assoc.

Senatobia, MS

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Bob Leigh & Assoc., LLC

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