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rates: Expect A Fed Funds Rate Cut This Afternoon - 03/18/08 10:50 AM
The Federal Open Market Committee meets today and will issue a press release in addition to cutting the Fed Funds Rate at 2:15 P.M. ET.
The verbiage of the press release will be as widely watched as the rate cut itself because markets are curious about how far the Federal Reserve will go to lessen the impact of an economic recession.
With every Fed Funds Rate cut, recession becomes less likely, but the other side of the equation is that the probability of long-term inflation grows. 
Like recession, inflation can be bad for the economy, too.
The Fed Funds Rate now stands at … (2 comments)

rates: Recession or Inflation? Even Fed Members Don't Know For Sure. - 03/05/08 07:47 AM
With Friday's jobs report looming, mortgage markets are especially skittish about whether the economy is in a recession, or facing inflation.
Four Fed speakers Tuesday did little to quell the debate:
9:00 A.M.: Fed Chairman Bernanke stayed on message that foreclosures and falling home values are dragging down the economy. 10:00 A.M.: Fed Vice Chairman Kohn said that banks will "face challenges" but will not fail en masse. 1:00 P.M.: Federal Reserve Governor Mishkin said that deflation is more concerning to him than inflation 1:00 P.M.: Dallas Fed President Fisher said fighting inflation is more important than fighting recession.Four speeches, four different perspectives.  … (3 comments)

rates: As The Fed Funds Rate Falls, 30-Year Fixed Mortgages Rise - 02/28/08 08:51 AM
Federal Reserve Chairman Ben Bernanke testified to Congress Wednesday, alluded to further rate cuts to support an ailing U.S. economy.
Already, the Federal Reserve has lowered the Fed Funds Rate by 2.250% since September 2007.
The graph at right comes from the Wall Street Journal and it highlights a very important correlation between the Fed Funds Rate and mortgage rates.
The correlation is that there is no correlation.
Since the Fed began cutting rates five months ago, mortgage rates on 30-year fixed mortgages are higher, as are jumbo mortgage rates.  ARMs, however, are lower.
Especially noteworthy is how 30-year fixed rates started to spike as the Fed … (4 comments)

rates: Looking Back And Looking Ahead : February 25, 2008 - 02/25/08 10:52 AM

It's a big week for mortgage markets (again) and that should cause rates to fluctuate wildly (again). 
The volatility we've seen since December has not been for the faint of heart.  Even this past Friday, as mortgage rates were poised to end the week lower, a late-afternoon stock market rally reversed it. 
In the last 45 minutes of trading, the Dow Jones Industrial Average swung 225 points.  Mortgage rates rose, too, peeving Americans who planned to go house-hunting over the weekend.
This week, mortgage rates will take direction from a handful of economic reports including the Federal Reserve's preferred inflation marker -- … (0 comments)

rates: Looking Back And Looking Ahead : February 19, 2008 - 02/19/08 08:48 AM
Early last week, mortgage rates rose on strong consumer spending and Warren Buffett's offer to assume $800 billion in debt from three major bond insurers.   
Both reports were interpreted as signs of long-term strength in the economy, leading mortgage rates higher for long-term products such as the 20- and 30-year fixed rate mortgage.
Meanwhile, Fed Chairman Ben Bernanke painted a different picture about the economy's health. 
In his testimony to Congress, Bernanke called attention to credit market weakness and alluding to a need for future Fed Funds Rate cuts.
The chairman's testimony, coupled with the worst consumer sentiment reading in 16 years, … (1 comments)

 
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