Interest rates Hit historical lows not so long ago and the economy did not collapse. I would tend to think that the rest of the world would continue to devalue our currency which would have the effect of increasing demand for our exports.
Long term rates and short term rates are not always correlated but the majority of people bought homes using a first and second mortgage. A 2 point reduction in the Fed Funds could potenially lower payments on 2nd loans by enough to help some homeowners skate by for a longer period of time. This would work against non homeowners at lease in the short term.
With additional time there is additional opportunities for government to conimue to step in to help these people or I should say hurt those on the sidelines.
