The Fed Cut Rate Train
Posted April 29, 2008 12:47 p.m. EDT
Updated April 29, 2008 1:05 p.m. EDT
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.
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.