OH – MY – GOSH! I was SHOCKED when I heard about the fed’s move to reduce the prime rate by 3/4 of a point. For a group that has moved in small increments in the past, this is a HUGE jump.
In one place I read this was the biggest adjustment of the rate in 12 years and in another, I heard it was the biggest in 24 years. Either way, it’s been a long time since they’ve done this kind of thing.
Also, they did it during an emergency session so market’s haven’t had much time to react. AND there have been reports that another cut on top of this one will be made at the next regularly scheduled session in about a week. Some suspect that the next cut will be as big or bigger than this one. If that happens, I’ll be even more shocked than I am now. I think having such a huge drop in the rate may be a bad thing, though I’m not educated in anyway on that. It just feels like a bad idea (and as I’m sure we all know, the market is in tune with MY feelings).