THE FEDERAL FUNDS RATE is the interest rate targeted by the Federal Reserve. It is the interest rate banks charge each other for overnight loans. After the recent cut on Oct. 30, 2019, the third cut this year, the rate will hover between 1.5 percent and 1.75 percent. The federal funds rate is not the rate used by banks for lending to individuals and businesses; that is the prime interest rate, currently at 4.75 percent. Since 1994 banks commonly calculate the prime interest rate as the federal funds rate plus 3 percent (in this case 1.75 percent plus 3 percent). Every U.S. bank sets its own prime rate; however, most utilize the same one.
The Federal Reserve changes the interest rate based on its feeling about the direction in which the economy is moving. The Federal Open Market Committee convenes about every six weeks and may also hold emergency meetings if monetary policy merits discussion between scheduled meetings. When economic data show the economy doing well, the Federal Reserve looks to keep the interest rate the same or perhaps raise it; the opposite occurs when the economy shows signs of weakness.
While lenders usually use the prime rate to calculate many loan interest rates, it is not mandatory for them to use this rate, nor is it a law. For instance, a mortgage interest rate is frequently lower than the prime rate because the mortgage is secured with real estate as collateral, which limits the bank’s downside if the loan goes bad. The customer’s credit history also plays a role in the bank’s interest rate decision.
The all-time high for the prime interest rate was 21.5 percent in 1980. Since 2017 the prime interest rate has hovered between 4 percent and 5.5 percent. The recent rate cuts signify the FOMC has concerns about the economy, as it has reduced the prime interest rate by 0.75 percent this year. Not every existing loan is affected by rate cuts, however. For example, for a loan with a balance of $500,000 with a variable interest rate based on the prime rate, it would cost $3,750 less per annum in interest charges due to the 0.75 percent lower interest rate. If someone has a fixed interest rate loan, the amount of interest would not change because the interest rate does not vary and would not be impacted by any rate cuts.
While it may seem like a good thing to have lower interest rates, it may signal a slowing economy and may negatively impact the value of investments, such as retirement plans or stock holdings.
FOUNDED IN 1534, QUITO sits at almost 10,000 feet, making it the second-highest capital city in the world. Located just 14 miles south of the equator, the city enjoys a spring-like climate year-round, from the cool 50s at night to the low 80s during the day. With a consistent 12 hours of daylight, Quito is, literally, one of the greenest cities in the world.
According to the U.S. Small Business Administration’s Office of Advocacy, small businesses create two-thirds of net new jobs and account for nearly 48 percent of the U.S. private sector workforce. And small- and medium-sized businesses outpace all other sectors as one of the fastest-growing in the United States. InterContinental® Hotels Group (IHG) goes above and beyond to create opportunities for this segment with its IHG® Business Edge program, voted Best Small- to Mid-Sized Business Program in Global Traveler’s 2019 GT Tested Reader Survey awards.
While we wait patiently for the go-ahead to travel, Crystal Cruises offers some home-bound programming with [email protected]. The virtual cruise experience was created to appease the wandering traveler’s eye and inspire future vacation plans, all from the comfort of home — a growing theme in the industry, but a novel idea in the cruising world.
A new report shows the country’s most miserable airports: Newark (EWR), Chicago O’Hare (ORD) and LaGuardia (LGA) rank near the top of the list.
The city took its name from Athena, goddess of wisdom, strategy and war, and protector of the city. The financial, political and administrative center of the country and an all-powerful city-state in antiquity, Athens is a major center of culture. A visit to the first-ever museum dedicated to Byzantium, a stroll around the National Garden and a trip to the Olympeion archaeological site will take you back through time.
THE LABELS ON SOME OF TODAY’S wine bottles sport a relatively new vocabulary, one that explains how the grapes were grown and made into wine. They include such terms as sustainable, organic and biodynamic, among others, and they warrant some explanation. Were the grapes grown by sustainable farming? Were they sprayed with organic fertilizers? Is the wine biodynamic? A number of the terms are new to many consumers. Some are controlled by the U.S. government; others are not. For simple definitions of this relatively new vocabulary, consider the following.
Kempinski Hotels are recognizing KEMPINSKI DISCOVERY members during this time of crisis: In case of interrupted stays, members of the loyalty program will not only be recognized for nights effectively stayed, but also for the nights they had to cut short.
Since 1970, Goway Travel has been committed to providing customized travel experiences for world travelers. Few things are better evidence of this commitment than being awarded the 2019 Trazees award for Favorite Tour Operator. Goway Travel heartily thanks the readers of Trazee Travel for this honor and for their confidence in Goway’s work in creating travel memories that’ll last a lifetime.
Two Florida Resorts, Naples Grande Beach Resort and Cheeca Lodge & Spa, See Trend of Rescheduling as Opposed to Canceling in Light of COVID-19 Outbreak
Good news is welcome in these times of uncertainty, and at least two Florida resorts, Naples Grande Beach Resort and Cheeca Lodge & Spa, are finding most travelers are opting to reschedule upcoming events and stays rather than cancel — a bright outlook for the travel industry to bounce back quickly once the COVID-19 pandemic is over.