Fed Cuts Rate .25% Anticipating More Housing Pain
The Federal Reserve cut the Federal Funds Rate by a quarter percent today following the last meeting’s half point cut. The stock and bond markets sold off on the news. Due to the bond market sell off, don’t expect lower mortgage rates immediately.
The stock market rebounded to the plus column with a 137 point advance. The bond market finished the day off by a half point raising the 10 year treasury yield to 4.5%.
Additionally, Fed Chairman Bernanke expects more pain in the housing market.
“The further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year,” Bernanke said. Read text of Bernanke’s speech
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Too little, too late? Time will tell…