Buffalo, NY (WBEN) Federal Reserve Chairman Jerome Powell hinted Friday he may lower interest rates. For many here in Western New York, it may be a good time for a big ticket buy that requires borrowing.
Mike Lomas of The Financial Guys believes Powell is spotting weakness. "Certain housing markets, not necessarily Buffalo, New York here, we've been pretty steady, but areas around the country that were, 'hotter real estate markets' have really, really cooled down in the last few months and so the economic numbers are pointing to a need to stimulate growth," says Lomas.
Lomas says lowering interest rates means more money in your pocket. "Folks who bought a home or a car in the last 12 months, if interest rates start to go down, they may refinance that, but it's more money in your pocket on a monthly basis," says Lomas. "If you're borrowing on a 30 year mortgage at five and a half percent, as opposed to six and a half, that's real money every month that's going to go in your pocket and go out and buy other things and help stimulate economic growth."
Greg Merkle of Osaic Wealth says the only people who might not like this are those who save. "Certainly you'll get lower rates in your savings accounts, money market accounts, CD, rates can come down. So from a savings standpoint, that's not always the best," explains Merkle. He says lowering interest rates certainly helps the labor market as well as hopefully help the housing market, considering the amount of limited supply and tons of demand.
Merkle says don't expect a drop of more than a quarter point. "I highly would doubt that this would be a panic and that they would lower them 5o points," says Merkle. Lomas agrees. "You see big cuts when the numbers support that, meaning we're in a recession. That means something happened negatively that we really, really need to try to offset." He says the economy is doing well at the moment.
