How Do You Prepare For Falling Interest Rates Take Advantage Of Low Interest Rates?
Interest rates play an important role in not only the economy, but in your personal finances as well. The Federal Reserve regularly monitors economic conditions and has the ability to raise or lower key interest rates that trickle down and affect everything right down to your savings account. As rates begin to fall, what does this mean for you, and how can you plan for lower rates? Understanding Why Interest Rates Fluctuate Planning for interest rate changes requires that you understand why the Federal Reserve makes these decisions in the first place. The Federal funds rate is the interest rate in which banks charge each other for loans on their excess reserves. Without going into too much detail, the Fed uses interest rates influence the economy. Interest rates increase in an effort to make borrowing money less-attractive and slow a rapidly growing economy. This is done because excessive growth and business expansion can lead to increased inflation. On the other hand, when the economy
