The Federal Open Market Committee (FOMC, Fed) decided to reduce the Fed Funds Rate to 3.0%. The Fed Funds Rate, the overnight rate at which banks lend to each other, affects short-term interest rates such as those on adjustable rate mortgages, credit cards and home equity lines of credit.
Quicken Loans Chief Economist Bob Walters says this decision to cut rates is another attempt to stabilize the markets.
"On the heels of last week's surprise rate cut, today's announcement was welcome news for the stock market," Walters said. "However, it remains to be seen if those interested in borrowing money for a home will benefit from the Fed's latest cut. Mortgage rates have begun to rise as bond traders begin to fear rising prices that could result from monetary and fiscal stimulus. However, the latest decision, combined with planned government spending and proposed expanded limits on federally insured home loans, will help in stabilizing the housing market and the economy at large by providing the liquidity to bring consumers back into the market who need to buy or refinance a home."
Abraham Martinez
Ocean View Int'l Realty, Inc.
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