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It’s not terribly surprising that the credit card industry is not happy about the new credit card rules passed by the Senate. While the House still has to agree to the Senate version of the bill, compromise is expected, and there are hopes that President Obama can sign the credit card bill by Memorial Day. The stock market doesn’t appear to really care about the news; investors are more focused on signs that the economy is recovering than they are on specific woes afflicting credit card issuing banks.

How you might be affected by the new credit card rules

Consumer protection is what is in mind with the new credit card rules. Unfortunately, credit card companies will have 9 months to act with a certain amount of depravity before the rules take effect. Among the rules that will limit the damage credit card companies can do to you are these:

• 45 days’ notice is required for changes to cardholder terms. This includes rewards programs, interest rates and other terms. 45 days should be sufficient for you to change what needs to be changed.
• Statements must be sent out 21 days before the due date.
• Over the limit fees can no longer be charged unless you give permission to go ahead when you have reached your limit.
• No retro interest rates on existing balances unless you are 60 days overdue on your payments.
• No more early morning deadlines for credit card payments. 5 p.m. is the new deadline.
• Banks must apply payments to higher rate debt first.
• Those under 21 with no proof of income must have a co-signer to get a credit card.

These new rules are expected to make it tougher for many to get credit. But is that such a bad thing? Perhaps it will force us all to think twice before we use credit. It could be a very positive development that provides us with incentive to carefully consider our spending practices and adopt those that are better for us.

Today the Federal Open Market Committee (FOMC) — a part of the Federal Reserve — had it’s regular meeting. With interest rates already set between 0% and 0.25%, there really weren’t any expectations of a new interest rate decision. However, the FOMC strives to remain relevant, and will do so through offering economic commentary. And by taking various actions to help with economic stimulus.

So, today, it is no surprise that the FOMC made an announcement that *gasp* as economic stimulus works its way through the financial system, there will be inflation. This is not a huge surprise; an increase in the money supply –  like we will be seeing with the eocnomic stimulus package — will, in fact, result in inflation. (Get your investments ready for inflation — TIPS could be a good idea while they’re cheap.)

Here are some of the actions that the Fed says it stands ready to engage in:

• Purchase long term Treasuries.
• Extend TARP to include funding for households and small businesses.
• Increase its purchase of short-term debt and mortgage backed securities.

These actions are all things that the Federal Reserve can do in an effort to get money flowing through our financial system. This action proves that the FOMC is still relevant — even without the ability to continue with interest rate cuts — and that it maintains some influence.

Of course, all of these actions will serve to contribute to future inflation, so now is a good time to be thinking about what you can do in terms of preserving your principal with carefully chosen investments.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

The stock market right now is being rather affected by oil prices. As crude oil rises above $143 a barrel, the stock market is in a bit of trouble, falling as companies expect cuts into their profits. But this falling stock market news has another implication — that there will be an effect on mortgage rates.

The Mortgage Reports Blog has an interesting analysis of how the stock market has been almost directly affection mortgage rates:

The greater demand for mortgage bonds led to lower mortgage rates on conforming home loans and this would have never happened if the Fed hadn’t set the table for a mortgage bond market recovery.

This week, therefore, as the stock market goes, so should mortgage rates.

If stocks are up, rates should be up. If stocks are down, rates should be down. This is happening because — at least for now — the mortgage bond market is serving as a safe haven from Corporate America.

Right now (and for the past couple of sessions), the stock market has been down. And current mortgage rates are down.

Mortgage rates often follow the lead of US Treasuries. This is because the rates on bonds (especially the ten year variety) are more closely tied to the long term nature of home mortgage loan rates. But things have been a little crazy lately. In some cases, mortgage rates have been rising when tey should have been falling. And now, with the Federal Reserve trying to ensure a mortgage bond market recovery, the stock market has become tied to mortgage rates — for now at least.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, stock market news, investing blog, Federal Reserve,
mortgage rates, investments, mortgage bond market