Fed Cuts Rate a Quarter Point, Banks Respond

The Federal Reserve cut the federal funds rate by one-quarter percentage point to 4.5 percent Wednesday.

In response, commercial banks, including Bank of America, Wells Fargo, and KeyCorp., announced that they were cutting their prime lending rate — for certain credit cards, home equity lines of credit, and other loans — by a corresponding amount, to 7.5 percent.

The decline in these rates generally also pushes down first mortgage and refinance rates.

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Source: The Associated Press, Jeannine Aversa (11/31/07)