The Federal Reserve held a special meeting last night which resulted in a .75% rate cut to the Fed Funds Rate to 3.5%.

This is the first intermeeting action since September, 2001 and the deepest one day Fed Cut since 1984!

A brief statement issued by the Fed this morning said:

'The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate.' http://www.federalreserve.gov/newsevents/press/monetary/20080122b.htm

In addition to the Fed Funds Rate cut they also cut the discount rate - the rate member banks can borrow directly from the Federal Reserve - to 4%.

There is still discussion of cutting the rate up to another .5% when the Fed meets for their regular session next week.

Naturally, the stock market is in a tizzy and interest rates will remain volatile as well.

It is recommended to float your rate locks for now - but keep on top of things as rates could be adjusted quite often in times like these.

Rates already dropped .125% from yesterday's rates: 30 year fixed is currently at 5.5% with NO Points, origination fees, etc!!