In a statement released today that can be accessed at the Federal Reserve Board Website it was announced that the Feds are going to keep interest rates at 5.25%.

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market. Going forward, the economy seems likely to expand at a moderate pace.

The FOMC monetary policy faced only one dissenting vote. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

Despite OPEC’s decision to cut production, the price of a barrel of oil continues to fall and so do gasoline prices. Prices have fallen even further in the last week, for a total of an average of 25 cents for the month of October.

Gas reached peaks of over $3 per gallon earlier in the year, but with gas now averaging about $2.20 per gallon nationwide, consumers are breathing a sigh of relief and their confidence in the economy shows in the market. But gas prices affect more than the general economy and decisions about long road trips.

When gas prices were rising the effects on personal finance were measurable according to Wayne Hochwarter, an associate professor of management in the College of Business at Florida State University.

Hochwarter’s study found that although the consumption of gasoline did not decrease, expenses in other areas of personal finance changed. The cost of gas forced consumers to rethink the way they spend money and at times cut back on necessities as well as non-essential expenditures.

Hochwarter also found that the stress of such worries negatively affected employees at work, leading to more job stress, lower job performance and depression.

Read about Hochwarter’s study here. Then, if you are in Oklahoma City, go fill your tank for $1.81 per gallon.

The American military is reporting in increase in the numbers of soldiers denied security clearance because of debt and financial problems.

Topping the list of debt problems were “payday loans”. Because military pay is so low, soldiers and their families facing unexpected expenses often find the only solution is a loan. The interest on these loans is so high, that they create financial hardship of their own when the soldiers don’t have the funds to repay them.

Payday loans offer quick cash advance loans to borrowers against their next paycheck, with exorbitant interest rates. The rates can be as high as a 390% APR annually.

President Bush signed legislation October 19 that would cap the interest rate these lenders are allowed to charge military personnel at 36%.

Scammers who ran a sweepstakes that promised $3 million in prizes but in reality delivered no prizes whatsoever, were charged in Federal Court by the Federal Trade Commission.

According to the complaint filed by the FTC in the US District Court for the District of Nevada, the fraudulent sweepstakes involved sending personalized letters to millions of consumers nationwide, advising them falsely that they had won a substantial cash prize. The letters requested that the consumers respond by sending $20 in order to receive their prize. Some other mailings stated that “unawarded money” had been “located and documented” in the name of the addressee.

However, instead of winning a prize, consumers were sent a newsletter telling them how to enter sweepstakes or requests for more money, suggesting that the consumer had won other prizes.

Defendants named in the case are:
National Prize Information Group Corp (NPIGC) and John Rincorn, individually and as an offcicer of NIPGC;
Prize Search Express;
Department of Unclaimed Awards;
United States Sweepstakes Advisory;
United States of America Patriotism Awards;
National Bureau of Prize Information;
and Lapham, Vargas and Cornell

For more information on sweepstakes scams, visit the FTC website.