The recent Federal Rate interest rate cut may be good news for borrowers, who may now pay less on variable rate loans or mortgages.
Many US financial organizations, such as Regions Bank, may however start to feel their margins squeezed. Regions Bank is one of many US based banks who deal in both lending products (such as Regions home equity loans) and savings products.
Although the rate decrease is good for many borrowers, it is not such good news for many savers. Banks are stuck in the middle since its margins, which are in some cases based on percentages, are being calculated on ever smaller numbers. It is thus the case that many banks, such as Regions, may just start to feel their margins getting squeezed.
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