Federal Rate Cuts: Only Few Benefitted

http://news.bbc.co.uk/2/hi/business/7300017.stm

The Federal Reserve has cut key interest rates a number of times and is scheduled to cut these rates again on Tuesday by a whopping one per cent. But the banks are not passing these rate cuts to the borrowers in the same scale. The efforts on part of Federal Reserve to bail out financial institutions and banks are widely reported, understandable and welcome. But it is not clear how these efforts help the hapless homeowners and other affected citizens. Apart from the 'stimulus package' that also gives homeowners a token tax relief, the fed rate cuts do not seem to benefit the people at large. Will the Feds kindly explain to consumers why it takes so long for their efforts, like the interest rate cuts, to trickle down to those for whom their efforts mean the difference between relief and agony.

Already, some homeowners have lost their homes and were forced to move into tented colonies. Some, in sheer desperation, burnt their own homes down. Unless the homeowners benefit from the Fed rate cuts substantially and the banks too cut lending rates, foreclosures and people losing their homes is a tragic story whose end is still not in sight.