The lowering of the interest rates by the  Federal Reserve means good news for the borrowers but bad news for the savers. The interest rates on most savings and money market funds would normally follow after 30 days of the interest rate adjustment by the Federal Reserve. With the current interest rate at 4% - 4.25%, some savers would see the interest rates at 3.75% a month later.

With the current housing slump and mortgage meltdown, this act by the Federal Reserve would somehow help borrowers obtain or refinance their mortgage loans. The interest rates on most personal loans and home equity loans would also be lowered, thus, helping most homeowners who carry high interest credit card rates to consolidate their debts.

This maybe a good time for a lot of homeowners to start their home improvement projects by tapping into their equity if they have a lot of equity and won’t be affected even if the housing prices continue to fall. Again, with the housing market sliding, not a lot of families would have enough home equity so for most homeowners, they would be better off just waiting in the sidelines until the housing market stabilizes.