Borrowers and depositors will feel in very different ways dramatic cuts in short-term interest rates made by the Federal Reserve.

Many borrowers should be pleasantly surprised, says Mike Matthews, regional president of Wells Fargo banks in Wyoming.

"It's going to save them money," he said. "This is a big enough drop that most Wyoming consumers will notice the difference."

Credit cards and home equity loans tied to the prime rate will see lower interest rates.

"I think it's safe to say pretty much all Wyoming households that do consumer borrowing are going to benefit from this," Matthews said, although how quickly will depend upon the financial product.

Long-term rates on home mortgages are more problematic. "The Fed can really only directly influence short-term rates," Matthews said. "Long-term rates have a mind of their own. They don't necessarily follow short-term rate changes directly."

Even so, changes in short-term rates can help create an environment which tends to influence long-rates, he added.

For depositors, the picture is less favorable. Matthews said people with money market accounts and certificates of deposit could see significantly lower earnings, although CDs won't be affected until they reach maturity.

"It's really hard on some senior citizens who are relying on interest earnings off CDs, for example, as their primary sources of income," he said.

Even so, Matthews said both borrowers and depositors have an overriding interest in a healthy economy, which is the objective of the Fed's aggressive action.

"It's probably good for everybody in the long term," he said.

Business Editor Tom Mast can be reached at tom.mast@trib.com, or call 307-266-0574.