The Federal Reserve has lowered [tag-tec]interest rates[/tag-tec]. The surprise to most economists was how much the reduction turned out to be.
Of course the stock market took off. That’s not surprising.
Question is what will this move do for [tag-ice]housing[/tag-ice]?
It’s a start. Real estate needs money to move.
Will this reduction cause inflation?
Only time will tell, but it’s a risk the Feds were willing to take to keep us out of a possible recession; always bad news during an election year.
Frankly, I’d risk some inflation too in order to receive the greater trade-off of freeing up more money for investments.
But Vitaliy Katsenelson has an excellent editorial concerning other moves the government may be making to aid distressed homeowners facing [tag-self]foreclosure[/tag-self].
I agree with his views that the government may end up doing too much for these folks. All the government really needs to do is free up the money. How the money is managed after that is really up to individuals. We can not expect the government to bail us out every time we err.