Well the Federal Reserve cut interest rates by another .5% today which makes that 1.25% in the last 10 days. What did Wall Street do? They acted excited, but by the end of the day the dow was down 37 points. The bond market was even less excited and there was almost no movement at all. Why is the big question?
I would love to tell you that I know the answer, but I don’t. Here is my best guess as to what will happen over the next 30 days. As the heavy money has a chance to digest the Fed comments and view the rest of the economic indicators that are coming out this week they will determine what direction the market will go. This week will still be a week with potential wild movements in both directions for mortgage interest rates. As the market recognizes that the Fed may have to take further action, positions on the bond market will be taken and we will see the 30 year fixed get down to 5.5% or possible below.
Here are the economic indicators that are coming out this week:
1/30 Gross Domestic Product (Advance) (BEA) 2007 Q4 8:30
1/31 Personal Income (BEA) December 8:30
Construction Put in Place (Census) December 10:00
For more you can go to http://www.economicindicators.gov/
If you have questions or comments about this please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.
1 comment:
Chris--what is your follow up to your Jan 31 posting? I am thinking of buying a house--but after waiting this long, dont want to jump if more dips in the rate are immiment.
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