Today's FOMC Announcement brought another Fed Funds Rate cut for the fourth time this year. Down another 25 basis points, the current Fed Funds Rate sits at a nice 2%. From the Press Release:
"The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability."
The Fed is expected to leave rates steady on upcoming FOMC Meetings to allow recent rate cuts to work their way through the economy since continuing inflationary concerns remain present.
In the meantime, Stocks lost traction in light of the news of the recent rate cut which is great news for mortgage interest rates (remember, when money moves from Stocks into Bonds, we see lower interest rates); we'll have a Daily Mortgage Update for you early tomorrow morning.
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Remember, a cut to the Fed Funds Rate helps your pricing on second mortgages and second mortgages only. Changes to your 30-Year Fixed Rate Mortgage on the other hand are tied to changes in the Mortgage-Backed Securities Market. It's the emotional reaction to the news of a rate cut rather than the rate cut itself that forces investors to react and affect the movement of money from Stocks to Bonds thus causing changes in the MBS market.
For now, pricing on a:
Home Equity Line of Credit = Prime - .45
Fixed Home Equity Loan starting at 7.35%
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