Does the lowered federal funds rate affect the prime rate?

Yes it has an affect but it is NOT directly tied the prime rate so there might not be any effect. The fed fund rate is what the gov. lends money to banks. The prime rate is really just what banks offer their customers in relation to what other banks are doing. So the net result is that banks will be making more money on the loans that they offer (Mortgage, auto, personal, etc....) But until the mortgage "crises" has calmed down a little and lending practices shape up, there will be slight movement in the prime rate.