The Federal Reserve cut short-term interest rates by 50 basis points early Wednesday morning, a move that should result in lower mortgage rates for consumers. The overnight Fed funds rate now stands at 150 basis points (1.50%). The U.S. central bank cut rates in tandem with its counterparts in Europe including the European Central Bank, the Bank of England and others. Earlier in the decade, after the terrorist attacks of 9-11, the Fed funds rate reached a low of 1% which ultimately led to a boom in mortgage lending, in particular the non-prime sector.
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