Agency: The Federal Reserve's interest rate cut may have a lagging effect on the economy

Joe Brusuelas, an economist at RSM, the insurance, tax and consulting firm, said the stimulus effect of the current round of Federal Reserve interest rate cuts on the economy may be more limited than in the past. With most homeowners locking in mortgage rates well below current levels, mortgage rates need to fall more sharply to significantly improve household finances through refinancing. Corporate balance sheets are already healthy, and the marginal effect of falling financing costs on incentivizing companies to take risks is weakening. Mr. Brusuelas also stressed that in the context of tighter immigration policies, even companies that intend to expand may face recruitment difficulties: "These factors combine to cause a longer time lag in the transmission of interest rate cuts to the real economy than historical experience." (Jin Ten)