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Fed cuts rate .25% but mortgage rates actually IMPROVE! why?

Posted on April 30, 2008 by Ray Williams (NMLS #216267).

If you have been following my posts about fed rate cuts, you knwo that traditionally it would mean worse rates for long-term lending (mortgages). Today after the conclusion of their meeting, the fed decided to cut the rate by .25% , though hinting that this will be the last reduction in rates.

Bond traders took away from this that inflationary concerns were in check and the market has since rallied. From that we have seen a nice run in the bond market and mortgage rates appear to be definitely dipping back below 6% again.

If you haven’t read the previous posts on what typically happens when the fed cuts rates, take a peek~

Talk Soon~

Ray

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