rates to go down !

Mortgage and Lending with kandola mortgage services


What does Merrill Lynch (buyer of First Franklin and First Republic) expect rates to do? They expect inflation to

eventually moderate which will give the Fed the room to cut rates and lower the Fed Funds rate to 4.25% (now at

5.25%) by the end of the year, helping ARM prices. Practically everyone else involved in bond and mortgage

markets, however, believe that expectations for an interest rate decrease faded last week and that there is a

slim chance of a Fed easing by year-end. Most expect a 25 basis point decrease in January 2008.

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