Monday Market Commentary: How Might a Fed Cut Impact Mortgage Rates?

by Alex Stenback on September 17, 2007

                                                                 Graphic Via MSNBC
Last Week:
A smattering of negative economic news pushed the outlook for Fed rate cut from "likely" to "foregone conclusion." This helped stocks, and hurt mortgage rates, which ticked up roughly .125% across the board.
This Week:
All eyes on the Fed tomorrow, and a fair bit of uncertainty surrounds how much they will cut, and how the markets will react.  How much they cut will not have nearly the impact that the accompanying policy statement will.  Any language that downplays inflation, highlights risks to the economy, and leaves the door open for further Fed easing will help mortgage rates.  Anything short of that is likely to be a mortgage market nuetral to negative event.
This Week’s Economic Calendar [Barrons]

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