Rate Winds Shifting in Washington?
Posted September 11, 2008
A rate cut??? Have the tides shifted that much recently? Where did inflation go?
The consensus is shifting in Washington that with economic activity really beginning to slow down, and the fact that inflation seems to have been kept in check, we might actually see the Federal Reserve present us with a nice little early Christmas present… an interest rate cut.
Inflation is defined as a general rise in the price of goods and services over a period of time… and as recently as the Fed’s August meeting, it seemed that in their viewpoint inflation was beginning to creep into the economy and that raising rates would be the right and necessary thing to do…
But… now that the price of oil seems to be subsiding, and the economy – both domestic and international – seems to definitely be slowing, a reversal of this fiscal mentality seems to be on the menu… Christmas may be coming early for all consumers and housing participants alike – an easing of credit and the hopeful return to positivity in the housing market!! Wouldn’t that be a nice treat considering the state of housing nationally over the past couple of years?
So cross your fingers consumers –this has already been a great week for the interest rate market – let’s hope it continues well into the fall – and ideally keeps floating along so that we kick off 2009 with a bang!
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.