Prime Rate Credit

It’s up to the Federal Reserve to decide whether interest rates (the prime rate as we talk about often here, hence the name Prime Rate Credit) should be cut amid a very shaky market as well as shaky faith in the market from investors as well as consumers. Ben Bernanke has been criticized recently that he isn’t doing enought to help ease worries and the general economy as well as a burgeoning problem about credit from major corporations.

You see, many banks, mortgage lenders etc. are on the verge of bankruptcy and have supremely bad credit now thanks to a sluggish economy and home buying market right now, and this is leading the Fed to worry about a total collapse of the economy if this problem is not resolved and a so-called domino effect is not caused by the bad credit crisis going on right now.

The Fed did not indicate that they were going to lessen restrictions on bad credit or that they were going to lower interest rates a few days ago, but now that several stocks have plunged over the past week due to bad loans and financial instruments not being honored by customers, many are wondering what Bernanke is going to do now after he pretty much indicated that there would be nothing done.

The latest news is that now people are thinking the Fed is waiting to see how employment reports are coming in, and use that as a deciding factor after this month to determine whether they will cut interest rates or not in response to worries about floundering credit with banks and other financial institutions that are having a bad time with bad loans etc. Hopefully they will do what they see fit and what is best for us as consumers and the overall economy, not just what’s best for institutions, although admittedly sometimes their financial whoas trickle down to us.