The Federal Reserve cut its benchmark lending rate to a range of 0-0.25 percent in an emergency decision on Sunday in response to the growing coronavirus outbreak and its impact on the economy.
The decision comes after the Fed made an emergency cut less than two weeks ago.
As the financial markets enter bear market territory, the likelihood of a recession continues to increase. Although no one can predict when a recession will happen, there are some steps you can take to prepare:
• Paying down debt: Paying off high-interest debt should be a priority regardless of how the economy is doing. Pay down what you can to create some breathing room in your budget.
• Boost your emergency savings: Even if you’re paying down debt, it’s important to save at least one month of living expenses. From there, focus on paying off debt and then continue building your emergency savings to cover three to six months of expenses.
• Focus on the long term: Don’t jeopardize your long-term investments based on short-term events. “Markets will undoubtedly overshoot to the downside, so it is more important than ever for investors to maintain their long-term perspective,” says Greg McBride, CFA, Bankrate chief financial analyst. “Markets will recover sooner, and much faster, than the overall economy, and you cannot be sitting on the sidelines when that happens.”
We also understand your financial circumstances may be more challenging. We encourage you to reach out to your bank to discuss potential relief and solutions they may be offering.
Read Bankrate’s article for more information on the Federal Reserve’s emergency rate cut and how it could impact you. Read More...