In a move designed to ease the burden on homeowners who have mortgages tied to the T-bill and move us away from a global recession, the Federal Reserve Bank today cut two short term interest rates.
As a result of this move, many homeowners will see their rates reset to less than 6% instead of the 7% they feared.
But was this move enough, and in time to stop recession? Current stock market investors voted no with their feet today, as all major indexes fell. Many economists and one Fed Reserve Bank member believe that a deeper cut of 1/2% was in order – given the current crisis.
Most Silicon Valley residents will not see a positive impact from this cut – as their jumbo loans are tied to the LIBOR index which will still be around 7%.