Interest Rate Cut Means Good Things for Consumers

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After four years of record high foreclosures and inflation rates, the Federal Reserve lowers interest rates.

News of the rate cut created an uproar at the stock market.

Within minutes, the Dow Jones soared more than 160 points and the business world has been abuzz with the news.

The Feds lowered the interest rate that banks charge each other by half a percentage point, from 5.25 to 4.75.

That's double the move many economists were expecting.

But what does this cut mean to our community?

The Feds interest rate cut means good news for P.J. Jones and his family.

He's ready to move out of his 1200 sq. ft. apartment and into the house of his dreams.

"There are certain locations we've been looking at and this may broaden the horizon so we can look at a home we probably couldn't afford, that may be in our price range," Jones said.

His one year housing hunt could finally come to end, but Steve Marcum, Chief Financial Officer at Citizens First Bank, says consumers aren't the only ones in our community affected by the Sept. 18 big announcement.

"This could be very positive for us to get people moving in new investments now that may have been sitting on the fence waiting to see what happens," Marcum said.

Marcum said this interest rate cut gives consumers an overall boost in purchasing power, which means more home for your buck, lower credit card rates and hopefully better mortgage rates.

Still, Marcum added that we can't forget the lessons learned from what contributed to the lending practices that got us here in the first place.

"There may be a permanent change now in the easy ability in getting a home loan and I think there's going to be some guidelines put into place that probably won't change for quiet a while," Marcum continued.

For Marcum, this means a little more fun next time he's out looking for his dream home.

"My five-year old thinks it's exciting to look at homes so now we'll find a bigger one that's maybe in our price range,"

Marcum said savers who invest in certificates of deposit may hurt a little as their rates will also be affected.

And analysts say this isn't a "fix all" and could cause inflation in the long run.

For more information on the big announcement, click here.

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