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Watch VideoLocal banks get many question about loan rates
Story By: Bill Folsom
Source: KOAA
Published Wed Dec 17, 2008, 05:26 PM MST
Updated Wed Dec 17, 2008, 08:45 PM MST
Stimulating economic activity is the intent of the dramatic rate cut by the Federal Reserve Bank. The fed cut its rate to basically zero-percent. The rate from banks is then three to three and a quarter percent according Mike Cafasso the Colorado President of American Bank of Commerce who says this unprecedented rate is for their best customers, “largely commercial loans.”
A natural question is whether it will affect car loans and mortgage rates. “The mortgage loans are not affected by prime rate directly. Mortgage rates are more reflective of the ten year treasury,” according to Cafasso. He explains the intent of this rate drop is to try and stimulate more commercial activity.
