Do they go to a special school to ’speak FED’??? Good Lord, fellas… we gotta be able to understand this stuff to be able to respond appropriately… or is that not what you want? LMAO

Well, the Federal Open Market Committee voted to cut the Fed Funds Rate by .5% today. The benchmark rate now stands at 1.0%. THIS DOES NOT LOWER MORTGAGE RATES

In its press release [email it to me], the Fed got busy addressing the main issue at-hand, stating that economic activity has “slowed markedly”. Ha… ‘markedly’… have you ever used that word in your life? Well, my readers are notably smarter than I am, so you probably have! Anyway, they pointed to three main causes:

Consumer spending is falling - *what the heck… get out there and spend your money!

Business equipment spending is falling -*well if you would spend your money, they would spend theirs!

Slowing foreign economies are hurting U.S. business -*so now they can’t spend money either!?

* Comments no included in FED Speak… commentary courtesy of your Mortgage Chili Blogger

The voting FOMC members are wary of an “intensification” [how many syllables is that? I count 6.] of the current economic tummy ache.

The announcement’s 4th paragraph is worth pointing out, too. It lists the number of growth-stimulating steps that the Fed has taken and concludes that our credit conditions should improve over time. It does continue by saying that IF markets don’t improve in good time, they will “act as needed”.

In the wake of the announcement, stock markets rallied… and mortgage backed securities… those that are avid readers here, know what they typically do, right? Sure you do. They Tanked! Surprise! Investors liked what the Fed had to say and it drew funds into the stock market from all corners of Wall Street. Yes, that large sucking sound… was all that money flowing back into the DOW and the like. Unfortunately for Orlando mortgage rate shoppers, one of those corners happened to be the mortgage bond market. The mass-exodus from MBS caused Orlando mortgage rates to rise.

As I have said over and over again… almost to the point of sounding like a broken record… it’s a common misconception that the Federal Reserve controls mortgage rates. When they make moves, they don’t effect long-term mortgage rates but do influence things like car loans, credit cards, and Orlando home equity loans.

As the Fed Funds Rate falls back near a 50-year low, mortgage rates are pushing up. Find out if now is the right time to do an Orlando refinance before mortgage interest rates move to high. Get the Orlando Mortgage Pros $199 - Mortgage Planning Questionnaire for FREE, using this link.

Source
Parsing the Fed Statement
The Wall Street Journal Online
October 29, 2008
https://online.wsj.com/internal/mdc/info-fedparse0810.html