Fed Cuts Interest Rate to Between 0.00 to 0.250 Percent
Well, it’s official. As of today, the benchmark Federal Reserve interest rate now sits at between 0.000 and 0.250%.
In its press release, the Federal Open Market Committee (FOMC) defined 3 economic areas marked by significant decline since October:
- The deterioration of the U.S. job market
- A significant consumer spending decrease
- Contracting business development nationwide
The Fed obviously hopes today’s rate cut will ease the financial pain and suffering brought on by these economic afflictions. What is telling is that the FOMC made a point of positioning inflation as a decreasing threat to the country’s economic health.
Perhaps this was the tourniquet needed to stop inflation from kicking in after today’s rate cut announcement – which is often exactly what does happen when the Fed cuts its rate. Smoothing out this latest rate cut a bit more is the fact that oil and commodity prices have been significantly lower of late.
Yes folks – today… Caesar Fed Chairman Bernanke smiled on the throngs of onlookers here in the world’s most widely monitored financial coliseum and showed them that the Fed is prepared to do whatever it deems necessary to save our economy. In turn, stock markets and mortgage bonds rallied.
We shall see if this rally “rocks steady…” or falters in light of the Fed’s plans to buy up mortgage-backed debt that smells of an altogether different flower.
Reuters.com has a good video on today’s Federal Reserve Rate Cut that I’d like to share with you here:
It is my sincere hope and desire to see us come out of the current economic struggle as soon as we can. If this latest move produces an extended rally – then I’ll sound a triumphant horn-blow of hope. Here’s hoping I can keep a tune.
Reference: Parsing the Fed Statement
The Wall Street Journal Online | December 16, 2008
http://online.wsj.com/internal/mdc/info-fedparse0812.html
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I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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Hopefully this will help keep mortgage rates low and the buyers will come into the market.
The fed seems determined to convince everyone that they are going to spark inflation and that it is pointless to hold your money as cash. If that is the case sooner or latter people are going to figure out that it is better to own a hard asset (home, gold, reits…) than it is to have cash.
Now if the banks would just figure it out.
Amen, Jay! Seriously, we’re making headway… just need to keep pounding that rock! Thanks for the great comment… and stop by back as you have the chance!
Kevin