Federal Reserve Lowers Interest Rate Again, not everyone agrees it is best..

This story was reported in the Lansing State Journal today:

Fed's move might help amid foreclosure crisis. Interest rate cut to 4.5 percent

Staff and wire reports

The Federal Reserve's latest interest rate cut - its second reduction in six weeks - could eventually help the housing market and mid-Michigan consumers.

On Wednesday, the Fed cut the key federal funds rate one-quarter of a percentage point to 4.5 percent to help the economy weather a deepening housing slump.
Fed Chairman Ben Bernanke and all but one of his colleagues agreed to lower the key rate. Banks started to cut their prime lending rates for their best customers by a corresponding amount - to 7.5 percent in this case.

But Wednesday's rate cut won't automatically mean lower rates on home equity loans and credit cards, said Michigan State University economics professor Charles Ballard.

What the cut will do is make it easier for lending institutions to make loans to consumers by reducing the short-term interest loan rate charged to banks.
Banks, in turn, may lower interest rates and mortgage rates.
Michigan already has one of the worst foreclosure rates in the nation, according to RealtyTrac, an online marketplace of foreclosure properties.
According to RealtyTrac's quarterly report to be released today, Michigan had the fourth-highest number of foreclosure filings in the third quarter, with 1 in 104 homes in the state the subject of a default notice, auction sale notice or bank repossession. That is up 65.7 percent from the second quarter and 110.7 percent from a year earlier.

The mid-Michigan area fared slightly better than the state, with foreclosure filings made at the rate of one for every 110 homes in Ingham County, one for every 188 homes in Eaton County and one for every 209 homes in Clinton County.

Irvine, Calif.-based RealtyTrac's filings data includes default notices, auction sale notices and bank repossessions.

The Fed rate cut won't necessarily help people with adjustable rate mortgages. But it may make it easier for people to refinance with standard mortgages.
"Hopefully, this will help more people to quality to buy a house or buy more of a house," said Denny Moore, associate broker for Coldwell Banker Hubbell Real Estate Co. in Delta Township.

Lansing State Journal business writer Barbara Wieland and Associated Press writer Jeannine Aversa contributed to this story.

What do you think? There are critics that say this is just window dressing and that it furthur hurts the American dollar worldwide because no other countries want to finance our debt anymore. Will it help or just make people temporarily see some hope? Let us know your thoughts by clicking on the "Comments" link below.