Fed Cuts Having Little Impact on Mortgage Rates

by Alex Stenback on January 30, 2008

Fed_cut_3 We’ve been away from the blogging desk for most of the day dealing with a laptop casualty.  Scrambling to catch up, but wanted to leave everyone with a thought to ponder:

The Fed has now cut rates by 1.25% in the last 8 days, and mortgage rates are unchanged to slightly worse as a result.

Today’s Fed Statement [Federalreserve.gov]
Fed Cuts Rate by 1/2 Point [NYT]

{ 3 comments… read them below or add one }

duane January 30, 2008 at 6:01 pm

yeah but i heard a guy at the coffee shop today say “hey they dropped interest rates again, i should refinance my house!”

joe February 7, 2008 at 12:35 pm

you need to realize that rates on 30 yr mortgages are based upon what goes on in the longer term bond market, not the short term fed funds rates….

Alex Stenback February 7, 2008 at 12:46 pm

Joe,

And you need to work on your reading comprehension skills.

That was the point we were making with the post:

Many casual obervers are under the mistaken impression that mortgage rates move with the Fed.

Thanks for stopping by nonetheless.

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