Possible interest rate cut this week

[MrLabGuy]

What is the consensus here? 1/4 or 1/2 point? Here is hoping for a 1/2 point cut for selfish reasons. I'm getting ready to lock into a new loan for a new home having the finishing touches done this week.

I'm guessing 1/2 point because the Fed usually overreacts and the news of record foreclosures has been the talk of the town.

Truth is the majority of the foreclosures won't be affected by any interest rate drop. Reason being, the housing market is still depressed and the people who are bailing out are in interest only loans which (for good reason) have been suspended. Even 5 1/2% 30 year fixed loan won't help someone who financed 110% with no money down at a 5 year adjustable rate.

[SANguru]

it's already priced into a lot of the mortgages and fixed income products so you should be looking at your rates last week! mortgage rates are not reactionary.

Originally Posted by MrLabGuy

What is the consensus here? 1/4 or 1/2 point? Here is hoping for a 1/2 point cut for selfish reasons. I'm getting ready to lock into a new loan for a new home having the finishing touches done this week.

I'm guessing 1/2 point because the Fed usually overreacts and the news of record foreclosures has been the talk of the town.

Truth is the majority of the foreclosures won't be affected by any interest rate drop. Reason being, the housing market is still depressed and the people who are bailing out are in interest only loans which (for good reason) have been suspended. Even 5 1/2% 30 year fixed loan won't help someone who financed 110% with no money down at a 5 year adjustable rate.

[E61Silver]

The Fed likes to have additional room to move, my guess is they will drop the rate 1/4 point and hint at further potential cuts.

[MrLabGuy]

Originally Posted by SANguru

it's already priced into a lot of the mortgages and fixed income products so you should be looking at your rates last week! mortgage rates are not reactionary.

I'm already approved for a loan with a good rate; however, I put off locking in until the last minute in hopes the rates would go down one more notch as a reaction to the economy. I fugued they would not go up so I took a gamble.

[kirkX5m]

i'm in it to make money off the stock market! and im betting on a 1/4 point cut if that. bernanke is not in a hurry to drop rates i dont think, and wall st and corporate america might be crying loud for a rate cut but honestly the fed is no here to bail everyone out either.... 1/4 point cut and a hint to further cuts if needed and wall st cries some more and loses a few hundies points.

[AutoXer]

I am hoping for a 1/2 point, but not sure it's going to help the long-term mortgage rates much. They are based more on long term yields rather than short term rates and are much slower to go down.

[Eric5273]

For selfish reasons, I always hope that there is high inflation, which I think leads to high interest rates. I'm a big exporter, so high inflation means that when I get paid in Euro and Yen, I get more money.

[MrLabGuy]

Originally Posted by Eric5273

For selfish reasons, I always hope that there is high inflation, which I think leads to high interest rates. I'm a big exporter, so high inflation means that when I get paid in Euro and Yen, I get more money.

LOL...Why does that not surprise me.

[motordavid]

Originally Posted by Eric5273

For selfish reasons, I always hope that there is high inflation, which I think leads to high interest rates. I'm a big exporter, so high inflation means that when I get paid in Euro and Yen, I get more money.

No economist here, but we, the US, have experienced very low inflation
the past few years, regardless of measurement(s). I suspect you mean
a weak dollar vs the Euro, Brit Pound, et al. That weak dollar is from a
combination of several effects, which I'll skip here. I've made some good
dough in my port. doing ETFs that are Euro/Pound targeted, but I surely
don't want much more inflation than we already have, esp. when
energy, food, and the "real stuff" is measured.

I don't know your biz, but few biz big shots I still know, would be in
favor of steep/more inflation, regardless of their biz or products or,
off shore sales percentage.

[Eric5273]

Originally Posted by motordavid

I suspect you mean a weak dollar vs the Euro, Brit Pound, et al.

Yes, that is what I mean. I'm no economist either, but I always thought it was due to the US having higher inflation than those other countries. Perhaps I am wrong. But yes, the less the dollar is worth compared to the Euro and Yen, the better I do.