Comments on: Prime lending rate cut by Bank of America http://www.100mortgages.org/20081030/prime-lending-rate-cut-by-bank-of-america/ Keep updated on the latest mortgage, global economy and business news Thu, 23 Feb 2012 13:33:00 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Prime http://www.100mortgages.org/20081030/prime-lending-rate-cut-by-bank-of-america/#comment-174 Prime Mon, 03 Nov 2008 16:06:08 +0000 http://www.100mortgages.org/?p=2490#comment-174 And, it looks like another 50 basis points is coming on December 16: http://www.wsjprimerate.us/wsjprimerate/2008/10/futures-market-100-certain-fed-will-cut_31.html Major U.S. banks may rebel by not lowering their Prime Rate -- or by lowering their Prime by 0.25 percentage point if the Fed cuts by 50 -- if the Fed lowers the fed funds target below 1.00%. If they do, they'll probably say they can't afford the cut; would hurt profits too much. This happened in Canada back in August when the Bank of Canada cut by 50 basis points, and Canadian banks responded with a 25 basis point cut to their Prime Rate. It'll be fun to watch what happens when the next FOMC meeting is adjourned. And, it looks like another 50 basis points is coming on December 16:

http://www.wsjprimerate.us/wsjprimerate/2008/10/futures-market-100-certain-fed-will-cut_31.html

Major U.S. banks may rebel by not lowering their Prime Rate — or by lowering their Prime by 0.25 percentage point if the Fed cuts by 50 — if the Fed lowers the fed funds target below 1.00%. If they do, they’ll probably say they can’t afford the cut; would hurt profits too much. This happened in Canada back in August when the Bank of Canada cut by 50 basis points, and Canadian banks responded with a 25 basis point cut to their Prime Rate.

It’ll be fun to watch what happens when the next FOMC meeting is adjourned.

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