Fed Cuts Interest Rates Again

By a 9 to 1 vote, the Federal Reserve's monetary policy committee (FOMC) cut the Fed Funds and Discount rates by 50 basis points today. The fed funds rate now stands at 3.00% and the discount rate at 3.50%. In their statement released right after the meeting, the committee stated that "financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets. The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully."

The move bolsters last Tuesday’s emergency rate cut of 75 basis points and is something that has not been seen in decades. The hope is that such an action by the Fed will help the financial markets in the long run. It will also bring immediate relief to credit card holders and individuals with adjustable rate home equity loans. For other adjustable rate mortgage holders, relief will only come if their interest rate change date occurs during this period of time. Additional mortgage relief will come in the form for refinancing opportunities and for new home buyers needing financing to purchase homes with mortgages at lower interest rates.

Based on the increase in activity we are seeing in the housing and mortgage markets in our area of Florida, our hope is these rate cuts will spur such activity everywhere else in the country and have a positive effect as we move further into the year.

Metro Mortgage Company is a full service federally regulated Mortgage Banker specializing in originating Conventional, Jumbo and FHA/VA loans. For more information on current interest rates, please contact us at your convenience.

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