The Federal Reserve lowered interest rates by 1/4% again today (Dec. 11) which, most likely, will result in banks reducing their benchmark prime rates to 4.75%.
A 4.75% rate would be the lowest level for the prime since March 1972.
The lower prime will help RV dealer profit margins because many of them have their floorplan lending rates pegged to the prime.
However, for most of this year, the Fed’s decisions to steadily lower the prime did not provide much stimulus for the retail market for RVs, although several dealers said they believe low interest rates contributed to the relatively robust RV retail market in October and November.
The Fed, in its statement issued today, said it believes low interest rates are starting to stimulate consumer demand, although it added, “those signs are preliminary and tentative.”
The next Fed meeting will occur Jan. 29-30.