This mornings Fed rate cut has added fuel to the rush to refinance by many consumers. With rates on the way down, now may be a great time to refinance your mortgage and save some money.
Today's cut by the Federal Reserve of .75% has sparked a rally in the mortgage bond market. However, it has not necessarily meant a substantial decrease in interest rates. The market was expecting the Fed to cut .50% at it's meeting next week. Rate's had already taken into account the .50% cut. What caught the market off guard was the fact the Fed cut by .25% more than what was expected a week before it was expected.
This has led the market to believe the economy may be worst off then expected. The Feds action was spurred by large losses in overseas stock markets on Monday as the US market was closed for the Martin Luther King Jr. Holiday.
So what does all this mean for you. It appears as though we are in a market where rates are likely to continue to drop until we see signs that the economy is moving back up and the housing market is starting to be more stable. Read my next post on common refinance questions.
