mortgage rates: Feds Funds Rate, Mortgage Rates Inflation - Buckle UP!
- 09/22/22 12:57 PM
Feds Funds Rate, Mortgage Rates and Inflation - Buckle UP! Waking up to pricing for long term mortgage rates this morning is like waking up with the worst hangover. Yesterday we saw the Feds again raise their Fund Rate by .75%. They toyed with a full point increase, but settled on 3/4 point. The experts I subscribe to imagined an 80% chance long term mortgage pricing would be better today. It was quite the opposite. I feel like I've said it a million times. When the Feds raise their Funds Rate it does not mean long term mortgage rates go up the same. Sometimes … (1 comments)
Yesterday the Federal Reserve increased their interest rate by .75% (3/4). Often this is confused with long term interest rates (fixed rate mortgages) going up by a similar amount. The Federal Reserve increases or decreases their key funds rate when they are trying to cool off or pump up the economy. There can be a few reasons for them to act, this year the reason is inflation. They believe by increasing their funds rate to 4% by year end should reduce spending; reduced spending results in reduced demand, reduced demand results in lower prices. … (8 comments)
Feds dropped the discount rate .5 points in a surprise move. A surprise move for the markets and unsuspecting public. Now what? Now the phone will start ringing for L O's from those with mortgages saying is my rate going down half a point?
No, long term mortgage rates are NOT going down half a point. In normal times a drop in the discount rate would actually make long term mortgage rates go higher. These times are not typical so I don't see rates going much higher after the Feds dropped the rate half a point.
Feds Funds Rate, Mortgage Rates and Inflation - Buckle UP!
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