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.
Without a doubt, the pandemic changed the role of airports in the travel industry. Hamad International Airport’s role evolved in many ways since the pandemic hit. Now, more than ever, airports are responsible for creating a secure passenger experience. As the gateway to Qatar and the world, the safety and wellbeing of staff and passengers has always been at the core of Hamad International Airport’s strategy.
I imagine that when writer Hans Christian Andersen mused, “Life itself is the most wonderful fairy tale,” he was standing at the edge of Copenhagen’s historic Tivoli Gardens, one of his favorite haunts, enlivened by the swirl of human happiness that surrounded him: children laughing; carousels spinning; games of chance played for prizes; lovers holding hands; hungry people whispering over sweets, hot drinks, beer and towering, open-faced smørrebrød, Denmark’s quintessential sandwich. That fairy tale lives on today at the second-oldest amusement park in the world, a spectacle of folly architecture, bakeries, gardens, rides, restaurants, puppet shows and joy ... and which also happens to be one of the city’s most storied places to convene for business.
The restored Park Hyatt Toronto reopened its doors, bringing luxury, sophistication and glamour alongside a nod to the hotel’s Canadian heritage. Alessandro Munge of Studio Munge collaborated on the hotel’s refresh, drawing inspiration from Canada’s seasons and natural landscapes.
GBTA’s Convention 2021 will bring the business travel industry together for the first time in a long time. Once again, you’ll learn and connect with experts and each other, along with discussions with leading thinkers, entrepreneurs and change makers addressing the issues that matter most.
I recently dined at Irwin’s in Philadelphia. The restaurant is located on the rooftop of the Bok Building, a former school turned collective of small businesses, non-profits, artist workshops, a bar and restaurant. I previously visited Bok for the bar and yoga classes, and I was excited to experience the restaurant.
Cathay Pacific reaffirms its commitment to reaching net-zero carbon emissions by 2050 with a pledge to use Sustainable Aviation Fuel for 10 percent of its total fuel consumption by 2030. The airline has made pioneering efforts in supporting SAF development for more than 10 years.
Since its prestige for attracting the world elite grew in the 1960s, Greece remains the go-to destination for glittering holidays. Each step of the journey is enrobed in luxury, from culinary traditions with the highest standard of execution and name-brand, high-end shopping to first-rate wellness locales and elite accommodations, like 5-star hotels, private villas and yachts.
Arriving early afternoon in Puerto Rico, we jumped in an Uber and took a short, 15-minute drive from the airport to La Concha. As it was Tuesday, the streets were not too busy and the hotel lobby was calm. During the weekend, the scene likely would have been more bustling. We were greeted by a staff member who requested proof of vaccination and government-issued ID, and were given a wristband to indicate we were fully vaccinated. All guests are required to be vaccinated and wear masks at all times while moving around the hotel. Hand sanitizer stations were placed around the lobby, in elevators and in each common area.