The Federal Reserve Tuesday announced that they would act in the form of a Quarter Point Rate Cut for the last action of 2007. Investors on Wall Street had anticipated a full half point cut and showed their disappointment by punishing stocks and driving the 10yr bond yield higher (meaning actually lowering consumer borrowing rates, opposite of the history of the past two rate cuts). So why did the market waiver from their initial reaction today and drive stocks higher? Well today's market was indeed volatile moving a full 380pts from its high to low and money flowed right back out of bonds back into stocks, driving consumer interest rates right back up. What does all this mean to us in the Pleasanton Real Estate community and the whole Bay Area Real Estate market in general....
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