Federal Reserve makes emergency move

MID-MICHIGAN (WJRT) -- (10/08/08)--All afternoon financial markets around the world -- including those on Wall Street -- have been reacting to an emergency move by the Federal Reserve.

The reserve dropped its key rate a half point to 1.5 percent.

So what exactly does this latest financial move mean for you? In the scheme of things, a University of Michigan-Flint professor says this cut really doesn't mean much directly to the average person.

But it does restore a little bit of confidence in the financial market.

Steven Barber, a finance major at U of M-Flint is getting some hands-on experience. He says right now he's taken on about $10,000 in debt.

"I've got a little bit between college and credit cards," he said.

Barber, like many others, is looking for any bit of financial relief.

And Chris Douglas, an economics professor, says the emergency rate cut by the Federal Reserve won't help the economic crisis facing many Americans.

"The rate cut is more geared toward large banks who are hesitant to loan to other large banks due to the whole panic about defaults and so forth," he said.

Douglas says people will know it's working if they don't see any change at all in the bills coming in.

"If people don't notice something, that's when the rate cuts work," he said.

"The credit crunch hasn't really impacted people yet. Local banks still are pretty free to give car loans and home loans and things like that."

Douglas says the key is not to panic, and if you can, try and ride out this economic crisis.

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