As mentioned in my earlier post, it will be several days before its determined who is helped and who is not by today’s drop in the fed fu …

Wait, what?

A jubilant Wall Street barreled higher Tuesday after the Federal Reserve cut its benchmark interest rate by a larger-than-expected half percentage point. The Dow Jones industrial average reacted by surging 335 points — its biggest one-day point jump in nearly five years.

Lehman rose $5.87, or 10 percent, to $64.49. The rest of the financial sector also soared.

Well, nothing wrong with that. I mean, if Wall Street is healthy, we’ll all benefit, right?

The lowering of the fed funds rate by the Federal Reserve is good for a …

Wait, what?

Meanwhile, the dollar tumbled to a new all-time low against the euro after the rate cut, because lower rates make a currency a less attractive investment. Crude oil futures catapulted further into record terrain, rising 94 cents to $81.51 a barrel, and gold prices rallied to a multi-decade high.

These factors could add up to trouble for the consumer. Though the Fed tends to measure inflation after stripping out volatile food and energy prices, high commodity costs trickle down to average Americans and can dampen their spending power.

Hey, wait a minute!

Source: Stocks Soar After Half – Point Rate Cut – Associated Press, by way of The New York Times

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Updated: 1st Quarter 2018

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