MONROE, LA. (03/20/2020)– The Federal Reserve lowered it’s interest rate to near zero. That’s the lowest level since late 2015. Darren Oglesby with the Oglesby Finance Group says the Federal Reserve has lowered the rates because of the country’s reaction to the coronavirus pandemic.
“The Federal Reserve lowering interest rates is doing so to not only instill confidence,” Oglesby said. “But also put back into consumers pockets to help lighten the blow, if you will, in the impending recession that we are already in or could lie ahead.”
This gives consumers an opportunity to catch up on bills.
“We have less money going to interest, so we have more money to either save for pay bills if we’ve lost our jobs, to buy groceries, to buy gas,” Oglesby said. “We’ll have more money in our pockets instead of sending it to interest, which is always helpful.”
Oglesby says this is also a chance for people to build up their savings.
“Make sure if you don’t have your savings built up to build that savings up, because it can mean a lot to you in the future,” Oglesby said. “I don’t think the fed’s doing that in any means for us to go out and use it for extra curricular activities, which I don’t think the average person will.
Oglesby says in the next 30-60 days, this money saved could be very crucial for those who are directly impacted by COVID-19.
“Who have either lost their job, know someone who has, or is directly impacted by our spending habits tat have changed as a reaction to what we are seeing towards the coronavirus,” Oglesby said.
While the lowered rates are helping some people save up or catch up, Oglesby says this will also lower the interest rates in which banks are paying for deposits.
“So people are likely to get less, much less on their deposits, savings, and checking accounts, and CD’s in the bank than they would have just 30-60 days ago so that’s also going to impact where they save and put their money because they are going to be getting a lower interest rate,” Oglesby said.
Experts say the fed’s rate-cutting actions are meant to help us rebuild, once the fight against the coronavirus pandemic is over.