On Wednesday last week, the Fed lowered the federal funds rate by a quarter point which prompted several commercial banks to lower their prime lending rate--the rate charged on credit card, home equity lines, and other types of loans--to 7.5%.
The prime lending rate typically has implications for rates on first mortgages and refinancing rates. A decline in one usually signals a decline in the other. We will have to watch mortgage rates closely over the next several months to see if banks reduce those rates as well.
Based on statements made by the Fed, this will likely be the last reduction in the federal funds rate for this year.
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