Interest Rate Cut?

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The Fed cut the interest rate by a quarter percent this week, and those of us who live on a fixed income have been trying to understand why it was needed. The economy is good and unemployment is low. I was fully expecting interest rates to continue climbing from 2.50% until they hit at least 3%. Back in 2007 the rate was at 5% for a brief period. But, it was at near zero for the 10 years after that. Only in the past 3 years has the interest rate started to go back up. I knew Trump was putting pressure on the Federal Reserve to cut rates, but I didn’t understand why. Then with one tweet the answer was clear. He wanted the rate cut in place before he announced more tariffs against China! The stock market reaction was swift, dropping about 800 points in 24 hours. So, now we are losing money in our retirement funds and our fixed income investments. The experts will tell you that this is a stock buying opportunity, but moving money into stocks always has greater risk. I will wait to see where the market settles before making any changes to my investments.

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