The Rate Cuts Are Coming...The Rate Cuts Are Coming!!

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Mortgage and Lending with Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL
Treasuries fell as higher-than- forecast reports on inflation and industrial production may reduce speculation the Federal Reserve will lower borrowing costs by more than a half-percentage point this month.

Yields on benchmark 10-year notes were near the lowest level in more than four years. The housing slowdown and losses on securities linked to subprime mortgages have led investors to push the yields down in the past month by the most in more than two decades on bets the economy will fall into recession.

There are even talks that the FED may come in with an inter-meeting rate cut!!

Some analysts are even talking about a THREE QUARTER OF A PERCENT RATE CUT?!!?

WOW!

The central bank hasn't eased by more than 50 basis points in a single move since Oct. 2, 1984!!

It looks like a rate cut for sure...it seems the only question now is...HOW MUCH??

I say 1/2 point.....Whats your guess?

:-)

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Rainmaker
300,425
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes
I would like to know when this rate cut will occur I am getting ready to take out a home loan and would rather do it after that point;)
Jan 16, 2008 03:57 AM #1
Rainer
68,945
Kris Krajecki
Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL - Huntley, IL
Mortgage Broker Huntley, IL
The FED is next secheduled to meet on January 29th and 30th....allthough it will most likely be moved up to the 27th and 28th since the 29/30 is a Sat./Sun.
...and then not again until March 18th!
:-)
Jan 16, 2008 04:01 AM #2
Rainmaker
291,304
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing
It is interesting.  This is especially good for my first time homebuyers.  Kris, thanks for watching this so closely and keeping us educated!  What do you think will happen now that the inflation report has come out?  Could it put a damper on the rate cut?
Jan 16, 2008 10:50 AM #3
Rainer
68,945
Kris Krajecki
Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL - Huntley, IL
Mortgage Broker Huntley, IL

I am putting in my guess at a 1/2 point rate cut, even after todays news.

:-))

Jan 16, 2008 01:01 PM #4
Rainmaker
291,304
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

I read a report this morning that discussed this issue.  The fear is that the rate cut will help stocks but hurt mortgage rates because the bond markets will be afraid of inflationary trends.

 

Jan 17, 2008 03:29 AM #5
Rainmaker
120,917
Richard Sweum
1st Security Bank - Everett, WA

Here is the rub...more rate cuts will continue to devalue the US dollar; 40% of mortgage backed securities are purchased by foriegn investors.  At the yields that MBS's are offered at currently, why would they invest in bonds tied to a weak instrument that are offering yields lower than what they could get elsewhere.

At some point, for FNMA and FHMA to get those bundles sold, they will have to offer higher yields.  If we don't experience a backlash soon after the fed cut, I'll be very surprised!

Jan 17, 2008 03:43 AM #6
Rainmaker
291,304
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

Rich, you said that so well.  By a backlash, do you mean you expect mortgage rates to rise after the rate cut?

 

Jan 17, 2008 03:49 AM #7
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Rainer
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Kris Krajecki

Mortgage Broker Huntley, IL
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