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Should Bernanke continue to lower rates?

Many people believe when the Federal Reserve lowers rates, the mortgage rates go down. UNTRUE! Rates are predicated upon several factors; the main one being how the foreign investors view our dollar. If they sell our bonds, our rates go up and vice-versa.

So, when the Federal Reserve lowers the rate it helps the banks BORROW money at a lower cost. Thus, the banks have more money to lend. There are rumblings the Federal Reserve is done lowering rates so as to avoid inflation.

What's more important right now...helping individuals save their homes OR inflation?

What do you think?

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Posted by Ann Sabbagh on 05/22/2008 07:19 AM

Comments (3)

inflation, lowering rates, federal reserve

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3 Comments on Should Bernanke continue to lower rates?

Inflation. There has to come a time wherethere is accountability for the buyer that bought the home. If the bought a home that they couldn't afford they should try to sell and downsize. They have to understand that they can't wait until the last minute and expect to sell their house in this market. not all foreclosures are from adjustable rates mortgages.

05/22/2008 07:31 AM

by Shaun Wren (Western & Southern Life)

No way. He shouldn't have lowered them back in January...over the next 6 months, the Fed should raise rates at .25 increments to stem the oncoming inflation explosion.

05/22/2008 01:45 PM

by Rich Sweum (Homestead Mortgage)

I back the last two commentors- inflation is biting into the dollar too much! No more rate reductions!

05/22/2008 07:30 PM

by Thomas Mortgage, Florida's FHA Loan Pro

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