WHERE ARE INTEREST RATES HEADED???

By
Real Estate Broker/Owner with REO PRO REALTY
A global credit squeeze has most economists convinced the Federal Reserve will come to the rescue and cut interest rates next month, a Reuters poll showed on Wednesday.

The survey of more than 100 economists across the U.S. and Europe taken Aug 20-22 represents a 180-degree turn on risks to the economy and is as sudden as the violent moves in credit, currency and stock markets that triggered such a souring.

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Median forecasts show they now expect the Fed to cut rates by 25 basis points by its September 18 meeting to 5.0 percent and to follow with another, bringing them to 4.75 percent by year-end.

Forty-five of 63 say the Fed will trim the funds rate by Sept 18, with 6 of those saying they will cut before and 18 saying they will stay on hold.

Thirty-four economists see a quarter percentage point of easing by then, 9 say 50 basis points and 2 thought the funds rate will be 75 basis points lower by Sept 18.

Economists saw the European Central Bank holding rates at 4.0 percent on Sept 6 -- 34 of 65 were making that call compared with only 2 of 65 just a few weeks ago, with medians showing 4.25 percent as the peak in rates.

However, the poll was taken before the ECB said on Wednesday that its rate policy stance was given by President Jean-Claude Trichet on August 2. Then, he used the words "strong vigilance" -- well-known codewords for a rate rise the following month.

As for the Bank of England, hawkish bets rates would climb to 6.0 percent, which had already dwindled to only a small majority before the recent market turmoil began, are now off the table and rates are seen on hold at 5.75 percent. Fifty of 53 see no move in UK rates in September

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Rainmaker
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Peter M . Christopher
Fairfield County Home Inspection LLC - Fairfield, CT
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Welcome to A/R.
Aug 23, 2007 12:56 PM #1
Rainmaker
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Nima Rezvan CT Lender CT Senior Mortgage Broker
Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT
First Time Home Buyer Expert - CT FHA Loans - FHA

Welcome to Active Rain! 

Interest Rates?  At this point, it doesn't matter what the interest rates are because we are looking for buyers first, then we can discuss rates!

Aug 23, 2007 04:51 PM #2
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Brad Andersohn
Executive Director of Education at eXp Realty - Fairfield, CA
ActiveBrad - 707.646.1876

Hi Rudy, I see this is your first post on Active Rain.  Congratulations!!  I just wanted to welcome you to our Real Estate Industry Network! 

Welcome aboard, I hope you'll continue to blog, and invite others.  Wishing you all the success this industry has to offer.

Enjoy!!

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Good Luck to you and your business!

Aug 23, 2007 07:09 PM #3
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Rudy Romo

REO Pro Realty
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