TODAY’S STARTING POINT
Q: I’ve wanted to buy a house for ages. How far do you think mortgage interest rates will drop? Will they go low enough for current homeowners to refinance?
Larry Edelman: Actually, rates on home loans had already dropped in anticipation of the Fed’s action; the average rate on a 30-year fixed loan was 6.1 percent this week. That’s down from 6.5 percent a month ago and 7.8 percent last October. Whoot! Mortgage rates don’t move in lock-step with the Fed, but they should fall even more when the central bank makes additional cuts. But here’s the thing: No one expects a return of the days when mortgages were under 3 percent. We probably won’t see rates under 5 percent for a while, if ever.
As for refinancing, it all depends on your loan rate. The rule of thumb is that current rates should be 1 to 2 percentage points below your existing rate so that you save enough on your monthly payments to justify the refinancing costs.
Q: Lots of people have student loans and/or credit card debt. Will this cut affect either of those?
Larry: Most federal student loans carry a fixed rate, so they won’t change. Some private student loans have a variable rate, but as our colleague Sean P. Murphy points out, private student loans do not offer the same benefits as federal student loans, such as deferment, repayment plans, and forgiveness programs.
As for credit cards, their outrageously high interest rates do change along with the prime rate, which is typically pegged to Fed rates. Will you notice a difference? Probably not, so keep paying your balances off each month if you can.
Q: I’m also thinking about my savings. It looks like this cut will mean that the interest rates on savings accounts will drop. Where should I put my money now?
Larry: Yes, the downside of the Fed lowering rates is that yields on bank CDs, money market funds, and online savings accounts will fall. If you’ve got any spare cash that you can afford to lock up, put it into an FDIC-insured CD before rates drop more. You could also consider short-term government bills that mature in a year or less.
Q: I read that the Federal Reserve cut rates so much because it’s worried about the job market. How are those two things connected?
Larry: Employers are hiring less than they were last year because consumers are spending less and there’s uncertainty about the economy and the election. But lower interest rates will help the economy by making it cheaper for consumers to borrow money and for businesses to get loans for expansion. And when they expand, they hire.
Q: Is there anything else people should know about how this interest rate cut will affect them?
Larry: We’re in uncharted territory. Usually the Fed cuts rates after there has been some sort of shock to the economy — like the pandemic — or when a recession has started. Today, the Fed is taking preemptive action. It could be up to a year or more before the full impact of lower rates works through the economy. So it’s far from clear whether the Fed can forestall a slowdown.
The Globe’s Sean P. Murphy has more on how the Federal Reserve’s interest rate cut may affect you in his column, The Fine Print.
POINTS OF INTEREST
BOSTON We created the ultimate Fall Guide with 90 things to do in and around the city as the leaves change color: concerts, live music, comedy shows, and more. (The Boston Globe)
LEBANON Israel bombarded southern Lebanon Thursday, with its military saying it hit hundreds of Hezbollah rocket launchers set to fire toward Israel. It was the heaviest attack in the nearly year-old conflict ignited by the war in Gaza. (Reuters)
SPACE The Earth is about to get a second “moon”. Starting Sept. 29, an asteroid will be looping around our planet for a couple of months. Sadly, the mini-moon will be difficult to see from Earth. (Time)
ON THE T Private bus firms that shuttle riders when the train is down (like the yellow Yankee buses) are making millions from the MBTA. The bill could hit $193.5 million. (The Boston Globe)
TOY HALL OF FAME My Little Pony, Transformers action figures, trampolines, the Pokemon Trading Card Game, and eight other iconic toys are battling for a spot in the National Toy Hall of Fame. You have until Wednesday to vote for your favorites. (The Museum of Play)
BEACON HILL Peek inside one of the largest properties in the neighborhood to hit the market in years. The 16,000-square-foot townhouse at 93 Beacon St. boasts an elevator, private courtyard, and more. (The Boston Globe)
ON A PRIVATE JET Steward Health Care CEO Ralph de la Torre often used the company’s private jet to fly to tropical destinations more than 100 miles away from any official Steward location, according to a new Spotlight investigation. Meanwhile, the company was crumbling. (The Boston Globe)
NEW YORK SNL kicks off its 50th season Sept. 28, and we now know who some of the guests will be: Jean Smart, Jelly Roll, Ariana Grande, Stevie Nicks, Billie Eilish, Chappell Roan, among others. Will cast member James Austin Johnson return as Donald Trump? (CNN)
TOPSFIELD Watch out where you buy your tickets for the popular Topsfield Fair: Police say a site called TicketsCenter is selling fakes. Buy yours only from the fair’s website or at the ticket booth at the fairgrounds. You don’t want to miss the Dock Dogs. (The Boston Globe)
PAKISTAN Amid a rocky economic, political, and environmental time, some Pakistanis are turning to YouTube astrologers for reassurance. But their growing popularity is raising questions about their legitimacy. (Rest of World)
ON THE GOLF COURSE All you duffers shanking and slicing your way through a game of golf have lost more than 1.5 billion balls just in the US since 2020. And far too many end up in the ocean, where they are toxic to marine life. (CNN)
ELECTION INSIGHTS | 45 days until the presidential election
There have been two conventions, two assassination attempts, one debate, and rallies galore. So who’s ahead in the race for president?
According to the averages of reputable national and state polls compiled by The New York Times, Washington Post, and 538 at ABC News, neither candidate has yet to gain a decisive advantage. Democrat Kamala Harris leads GOP nominee Donald Trump by 2 to 3 percentage points nationally as of yesterday.
The national number is one thing, but we all know that what really matters are the Electoral College votes. So when it comes to seven battleground states — Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin — Harris is either ahead or tied with Trump in most of them.
- Harris ahead: Michigan, Pennsylvania, and Wisconsin
- Trump ahead: Georgia
- Harris and Trump tied: Arizona, Nevada, North Carolina
The Washington Post’s averages also have Harris leading by 2 points nationally. As for the battleground states:
- Harris ahead: Michigan, Pennsylvania, and Wisconsin
- Trump ahead: Arizona and Georgia
- Harris and Trump tied: Nevada and North Carolina
Finally, 538 at ABC News has Harris ahead by almost 3 points nationally, and gives Nevada to Harris (for now):
- Harris ahead: Michigan, Nevada, Pennsylvania, and Wisconsin
- Trump ahead: Arizona and Georgia
- Harris and Trump tied: North Carolina
Note: These news organizations don’t compile all of the same polls and give more weight to different surveys. These are running totals that change whenever a new poll is added to the mix. And all of them have varying margins of error.
Are polls accurate? Here’s one view from Nate Silver.
TEXTING PROMPTS | For the lazy but social
Copy and paste these text messages so that making plans with friends is easier.
We should go before it ends! https://downtownboston.org/explore-downtown-boston/downtown-boston-events-calendar/downtown-boston-arts-market-3/
Wait, I really want to try the caber toss hahaha https://nhscot.org/wp-content/uploads/NHS-HighlandGames-ProgramMap-2024-WEB.pdf
Let’s pregame Oktoberfest https://trilliumbrewing.com/pages/event-calendar
I want to win the Fluff Limbo https://www.flufffestival.com/#festival-map
I’ve always wanted to do a corn maze omg https://www.vermontcornmaze.com/
POLAROID DIARIES
Where we share our adventures around New England and rate them for Starting Point readers.
This indie movie theater that doubles as a concert venue is a perfect place to watch the latest films as well as classics while supporting a local business. The beautiful art deco architecture transports you back in time, complete with a retro concession stand. And the popcorn is pretty decently priced compared to the large movie chains: A small goes for $5. Rating: Bagged 9/10 (💰)
This eatery specializes in Mediterranean and Jamaican food, but my rating is based on my trying only the latter. The food is flavorful, and as someone who enjoys hot dishes, the high spice level actually surprised me. Some of the dishes are made-to-order so you might have to wait a bit for your food — but it’s worth it. Plus, the restaurant is walkable from many historic Salem sites. Rating: Bagged 9/10 (💰)
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Diamond Naga Siu can be reached at [email protected]. Follow her on X @diamondnagasiu and Instagram @diamondnagasiu.
This post was originally published on here
