The Federal Reserve chairman met with members of congress to discuss measures to stop the current recession of the US economy. In addition to lowering interest rates, the Federal Reserve plans to go forward with a “quick, stimulus package” to alleviate the recession woes. Watch the video to find out what this includes.
While the action of the Federal Reserve to lower its rate to 2.25% grabbed the headlines, a little further behind the scenes were several positive indications for the mortgage markets:
As much as the regulatory actions indicate a desire to ease the mortgage crisis and stimulate the economy, it is the financial market developments that could indicate a fundamental improvement in conditions on the way.
This move is part of a growing patchwork quilt of government economic initiatives which have emerged since year-end. That quilt includes:
Three separate Federal Reserve rate cuts
A sweeping tax rebate program
Extraordinary measures to provide liquidity to financial institutions
The maddening thing about economic policy moves is that it will take months to know how they will pan out. However, while Washington and the heartland wait to see what the results of these stimulative measures will be, one group that should not be waiting is mortgage shoppers. For anyone looking to refinance, and especially for prospective home buyers, the best time to act might be the present.
With all of the recent news regarding the Fed cutting rate, the Fed’s anticipated rate cut on March 18th, 2008 and some rates going up, it may be difficult to keep track of which rate we are all taking about. The Fed and the economic headlines often use the word “rate” to refer to a variety of interest rates that help steer the economy and provide liquidity to the credit market.
In most cases, whenever one uses the word “rate” and the Fed in a single sentence, they are usually referring to the Federal Funds Rate. Read the rest of this entry »
