Breaking Financial News: Fed Cuts Rates
The biggest news today is that the Fed has issued an emergency rate cut — the biggest cut since 1982. Today, in response to a stock market that plunged dramatically yesterday, and in response to worries of an even bigger plunge today, the Federal Reserve made a 75 basis point cut, more than a week ahead of its scheduled meeting for the end of the month. Bloomberg reports on the emergency Fed rate cut:
“Broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,” the Fed said in a statement in Washington. The FOMC took the action “in view of a weakening of the economic outlook and increasing downside risks to growth.”
Policy makers set aside concerns about inflation to lower borrowing costs for the fourth time since September after the unemployment rate hit a two-year high and stocks slumped. Chairman Ben S. Bernanke shifted the Fed’s stance to a more- aggressive approach in remarks this month citing a need for “decisive and timely” action.
While a Fed rate cut doesn’t normally have a big impact on mortgage rates, one of this magnitude may cause an interest rate cut for mortgages. As far as the stock market is concerned, the move cushioned the blow this morning, but volatility is expected, and some feel that the rate cut, dramatic as it is, may not be able to prevent a recession.
Tags: financial news, emergency fed rate cut, home mortgage loan, mortgage blog,
mortgage rates, lower mortgage rates, stock market
January 22nd, 2008 at 12:17 pm
[…] unknown wrote an interesting post today onHere’s a quick excerptThe biggest news today is that the Fed has issued an emergency rate cut — the biggest cut since 1982. Today, in response to a stock market that plunged dramatically yesterday, and in response to worries of an even bigger plunge today, … […]
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