I’ll have more this afternoon on the Fed’s decision, but I wanted to throw a couple of thoughts out there ahead of time:
1. Remember, there is not a specific link between what the Fed does and what the mortgage market does.
2. The market is pricing in at least a .5% cut in rates today.
Therefore, if we get .5%, we probably won’t see a huge reaction.
However, here’s my take on things:
The Fed is going to cut rates by .5%.
It won’t make a huge amount of difference in the market.
But the Fed’s statement will paint a rather bleak picture of the economy and that will restore the fundamental link between the economy and the mortgage/bond markets. Once that happens, we’ll see some easing in mortgage rates.
Stay tuned.
Last 5 posts in Mortgage Rates
- A Kick in the Stomach? by the Fed? - November 5th, 2009
- So... What did the Fed do? - November 4th, 2009
- Home Refinancers Save $3 Billion - November 2nd, 2009
- So, How's the Mortgage Market Today? - October 29th, 2009
- RateWatch October 28 - Sustainable? Depends on what you mean. - October 28th, 2009
- Stumble it!
- Categories: Mortgage Rates
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Mortgage Rates in November, 2008 | Mortgages Unzipped
[...] As Tom Vanderwell noted, the Fed’s announcement should refocus the mortgage-backed securities traders to examine economic fundamentals. When the economy is contracting, rates trend [...]