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Yesterday's rate discountTy Mann, our trusted lender of many years, just sent us this email regarding interest rates and yesterday's Fed rate reduction... This is what my
sources are saying-
"Yesterday, the
Fed surprised many economists and traders with a half percent cut
in both the Fed Funds and Discount Rates. The Stock Market
responded favorably, with its best performance in 5 years, and
mortgage bonds rallied as well.
But yesterday's
rally in Bonds doesn't make a lot of sense. The 50 basis point cut,
as well as the additional weakness in the Dollar, has to raise
concerns of longer term inflation. Bonds have a history of trading
lower after a Fed rate cut. With Bonds already trading lower than
the best levels of the day and some negative technical signals
appearing, I feel it is prudent to lock today."
For those of you
not under contract, rates could potentially worsen. They
still have the support of the 200 day moving average which should
keep them somewhat steady, but if the bonds push through it, rates
could drastically increase. I will keep you
updated.
10:28 AM - Sep. 19, 2007 - comments {0} - post comment |
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