“Fed Cuts Rate by Half-Point; 2nd Reduction in 8 Days” [New York Times]
In lowering its benchmark Federal funds rate by half a point, to 3 percent, the central bank acknowledged that it is now far more worried about an economic slowdown than rising inflation, and it left open the possibility of additional rate reductions.
“Financial markets remain under considerable stress, and credit has tightened further for some businesses and households,” the central bank said in a statement accompanying its decision. In addition, it said, recent data indicated that the housing market is still getting worse and the job market appears to be “softening.”
What’s going on here? This roller coaster is making us queezy!
Marc Herrenbruck had this to say:
As expected the Fed lowered “rates” by .50% so how will this effect you? Banks will be reporting that Prime has now fallen to 6%! Four months ago it was at 8.25%. People with HELOC loans rejoice you have experienced a 2.25% reduction in your interest in the last 4 months or if you had a $250,000 line of credit your payments went from $1718.00 to $1250.00 a month, a savings of almost $500.00 a month! I also want to say that rates for 30 year, 15 year and 3,5,7,10/1 arms are not benefiting from this in fact rates have been going up since the Fed lowered rates by .75% last Tuesday. That is because money is moving from the bond market to the stock market which supports what the Fed is doing to fight recession, lower Fed Fund and Discount Rates to stimulate the economy.
6 thoughts on “Chop go the rates…again! (Feds cutting rates makes us queezy)”
Thank you Bernanke :) Heloc users, car debtors, school loan borrowers thank you!
1 foot of snow tomorrow night in Tahoe!
More sales and discounts in San Francisco!!! Buy now or be priced out for the next 6 months! :-)
According to Bankrate.com, rates are up after this cut:
oops. Messed up the link. Just pasting this time:
U.S. mortgage rates reverse course and rise
And down again today.
Conforming loan limit raise will change peoples lives. This could very well be the best thing for most people. It was a huge deal when it went for 359,650 to 417,000. Going to 675,000 will change everything and get alot of people out of trouble. Some may buy and some will just refi and take the savings. Either way people will win. Rates are very good right now. 6% or less is very attainable and would save alot of people money.