The Federal Reserve has cut interest rates for the second time in nine days...Should we refi our mortgages?
The central bank lowered rates to 3% from 3.5%...
The Fed is hoping the cuts will cushion the US economy from the worst effects of the credit crunch and housing slump.
Mortgage lenders are literally swept off their feet right now. They are reporting major call volume increases, as much as 10x and more, to the point that they are using call centers to handle the massive load. Is there a refi boomlet underway? We will see. sourceAnd
This week's surprise rate cut by the Federal Reserve not only held Wall Street and investors in thrall, but it also kicked into high gear a rush by homeowners across the country to refinance their mortgages at today's lower rates.But
"Wells Fargo is experiencing a significant increase in contact from customers who want a responsible lender to help them with a refinance or home purchase," Debora Blume, spokeswoman for Wells Fargo Home Mortgage, said in an e-mail to The Des Moines Register on Friday. source
Countepunch: America's Teetering Banking System By MIKE WHITNEY
The Fed sets short-term interest rates (the Fed Funds rate) but long-term rates are market-driven. So, when investors see slow growth and inflationary pressures building up; long-term rates start to rise.
Bernanke knew that the price of a mortgage would increase if he slashed rates, but went ahead anyway.
3 comments:
I think they'll be lowering all yr. BV$H 1 and 2 had the Fed. drop rates really low to bail out the big banks. The problem is that this time the bubble in the housing market has already popped and unfortunately the shock wave still is working its way through the system. This rate drop will just fuel inflation and do little to revive the housing market and car markets for other reasons. For one the consumer is tapped out, his pay check if he or she is lucky to have one hasn't near kept pace with the inflation of everything u need. The phony low inflation numbers are based on all the crap we don't need. The Fed. is now panicking and trying to throw money on the fire thats burning down the economy. How long could these BIG Corps. cut employees and pensions and health care and everything else giving all the gains to a few people at the top of these companies? The phony ass BV$H boom only enriched 2% of the public everyone else eat shit for 7 yrs. Now the bill is coming due for his outrageous tax cuts and deficits and the war. He's trying to pay all this off now with cheap money. Not going to work. The world is running away from dollars so pumping even more of them into a bloated world market won't work. All it will do is make things even worse. Remember in the 70's the Fed. tried to kill the inflation by boosting rates up to 15% to kill of the that hyper-inflation.
GK if you pass by any articles on the web that catch your eye on this topic, feel free to paste the address. I have a lot of catch up to do, but I do understand some of the dynamics.
I will. Its crazy out here right now. BV$H and his buddies have one more yr. to totally and completely wreck this country and they'll do everything possible too that end. These men believe in destroying things and then like vultures swooping in to pick off the weak. SCUM total human filth the whole bunch of them.
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