How Low will Interest Rates Go?

The leading Fed watchers say that the lowest interest rates will go is 2%. This will most likely happen by the summer. "For the rates to move lower, economic weakness would have to be much more intractable than now envisioned" they said. The Fed forecast is said to be for sluggish growth with downside risks. Everyone who is not in the Fed will experience a recession if this happens. There are not worries of inflation but worries of falling prices, especially in home values for example, which is a bigger worry. The forecast of a 2% Fed funds rate by the summer fits with the current expectation of financial markets, as measured by the Fed funds futures contract. Money market futures contracts expect a half-point reduction to 2.5% on March 18. 

A lot of chief economists seem upset with the actions taken by the feds. They see the fed to continue cutting the interest rates in the future. All of these cuts taking place will lower the values of homes and other things of that such. This can put a lot of people who are trying to move to another home in a bit of financial trouble when they go to sell their house.