This week, look for the Fed to cut the Fed Funds rate (the rate for overnight loans between banks) by a half point, to 0.50 percent. While a cut by the Fed often causes home loan rates to rise (because a Fed cut can lead to inflation, which is the arch enemy of Bonds and home loan rates), the deflationary environment we are currently in may prevent home loan rates from worsening.
Another event to note on Tuesday is the release of November's Consumer Price Index (CPI) Report. This widely watched inflation indicator tells us how much more expensive goods and services are this month over last month, and with recent concerns on deflation - this will be an important report to watch.
Bonds and home loan rates ended the week at their best levels of this year and in over five years. Let me know if you want some more information about how you can take advantage of the current situation.
Have a safe week!
Keller Williams Realty
Rates, Financials, Fed Action