Fed Cuts Discount Rates by 50 Basis Points

August 17, 2007 | Posted by Jorge

First off, what exactly is the discount rate? The discount rate is the short-term interest rate that banks can borrow at. The current rate is now at 5.75%. The Federal Funds rate, the interest rate that banks lend to each other overnight, remains unchanged at 5.25%. Early morning trading showed the financials up huge with Goldman Sachs (GS) leading the way with a sharp 8+ point gain. Today is a good day to be a bull! Some folks are right… it doesn’t pay to panic. I know I panicked a bit yesterday and I’ll regret it but that’s how you learn. It’s going to be days like this that you learn not to panic.

I predict a 300 point jump in the market today. I hope I’m wrong and it goes higher!

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