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Triangle Business Today

The Fed Cut Rate Train

Posted April 29, 2008

Will This Be the Last Cut on The Fed’s Express Train?

The Federal Reserve meets again tomorrow to discuss the interest rate situation here in the US – it’s very likely (and the markets have already prepared) for a 25 basis point –or .25% reduction in interest rates. Long term rates (mortgage) will likely not be impacted too much as the market has already factored this in… but consumers will feel the benefit when their Home Equity, Credit Card and Auto rates get lowered again.

Here’s the real dilemma – nationally, the housing market is still neck high in mud – home prices and values are still dropping like bricks in many national markets – we’re still very fortunate here in the triangle, as it seems although houses are taking longer to sell these days, we’re not seeing the reductions in values to the extent that others are feeling nationwide. Consumer confidence levels released this morning continue to show that we’re depressed as a society as our discretionary spending is down to nil for many folks which means too much time spent at home with no play time. Gas continues to spiral out of control – soon you’ll be using those HELOC checkbooks to fill up your tank – not a pretty thought.

And there’s potential that the Fed will have to deal with inflationary pressures soon. That my friend is a whole new pot of boiling water.

Stay tuned…

Jeremy M. Salemson
CEO
Corporate Investors Mortgage Group, Inc.
www.cimginc.com

 

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  • Rolling Along Apr 29, 2008

    They could bottom out the rate to nothing and it still would not help the subprime mess. I am with "whatelseisnew" I buy what I have to have. I drive a 12 year old truck that does just fine...best part...it's paid for. No credit card debt OR mortgage, paid that off years ago. Live below your means people!

  • whatelseisnew Apr 29, 2008

    Does not bother me one whit. I never have been into this whole consumerism thing. I buy what I need. When something wears out I buy a replacement. If something breaks, I either fix it, or if it makes no sense to fix, I replace it. I am not a shopper; I actually do not get what that whole disease is all about. Yep the inflation issue is tricky, cause the usual response is to raise rates.

About this Blog:

Jeremy Salemson, CEO of Corporate Investors Mortgage Group, blogs about economic trends and data and their impact on Triangle business. Each week, he interviews a Triangle-area business leader for a personal look at the local economy.