Today the Federal Reserve took the unprecedented step to lower interest rates to what they call a “target range of 0 to 0.25%.” The central bank said that rates would need to be kept low for quite some time. Most economists and strategists believe that the historic move by the Fed today was largely to boost morale in the markets. At least for one day it worked, as the Dow finished the day higher by 359 points after the surprise announcement. Whether the enthusiasm on Wall Street will continue for very long is certainly something that is very unclear.

Not only did the Federal Reserve lower the fed funds target rate, but they also announced they will be buying treasuries as well as credit card debt and student loans. In the Federal Reserve’s statement they seemed to foresee that the biggest role they can play in helping turn around this ailing economy is through asset purchases in specific areas which they believe will serve to support economic activity.

What can consumers expect after today’s announcement? Borrowing money will be extremely cheap, so if you want to borrow for any kind of investment or purchase, you can expect to pay a whole lot less than you ever have before. On the flip side of things, those who have money in investments such as certificates of deposits will notice that the banks will be offering much lower yields on these safe investments. For every move that the Federal Reserve makes there is always someone who will benefit and someone who will suffer. In the long run I understand the Federal Reserve’s decision to lower interest rates to the lowest point ever, but I also believe that when the economy starts to recover the Fed should move quickly to bring rates back to reasonable levels. Why is this important? Many, including myself, believe that low interest rates contributed to the housing bubble that has currently burst and brought our economy with it. Take advantage of these lower borrowing costs if you have a specific need, but otherwise save up and get through this severe recession.