There’s been a lot of talk recently about the recent rate cut from the Federal Reserve of 0.5 percent. It was obvious that Wall Street loved it as the market experienced a large upswing, but many others are critical of the move and view it as a Wall Street bailout. What does it mean to your average person though?

Within days of the rate cut, I was informed that the rate on my ING DIRECT money market account was being lowered to 4.3% APY from 4.5% APY. This isn’t isolated however, savings and money markets are lowering rates all over the place.

Those with ARM mortgages might benefit as their loans may reset to a lower rate after the introductory period lapses. This is nice for those that bought more house than they realistically could afford, but interestingly enough, longer term rates have actually increased. These longer term rates are what affect the traditional fixed rate mortgages. So it would seem that the financially prudent will once again be paying to bailout the unwise.

Whatever your view is on the recent rate cut, there isn’t much that the average person can do about it. What we have to be able to do is adapt as best we can to the circumstances that we’re given. If interest rates continue to drop for money market accounts, other options can be explored. The stock market usually reacts positively as interest rates fall which could be helped further as people pour more money in as their cash accounts don’t perform as well.

Most people won’t be noticeably affected by what’s going on, but for those of you who pay attention to these sorts of things, you’ll begin to notice ways that you can take advantage of the changes. It also serves as a reminder that our financial plans can’t be static. We must be willing to make changes and adapt to the changing market and financial conditions.

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