Fed Cuts Rates by 1/2 Point, Aggressive Move Good For Housing and Economy

The Federal Reserve in a suprising move has cut both the fed funds rate and the discount rate by half a point this afternoon in an aggressive move. "Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time" the Fed said in its accompanying statement.

Make no mistake about it, a 50 basis point reduction in rates goes a long way towards stimulating up our economy, helps cushion the pain of the credit crunch, and increases the odds that Wall Street bonuses won't be so bad after all. All three factors have major implications on the New York City real estate market, and all three factors have improved with today's Fed cuts.