Rates always HIGHER after the last FED CUT

Rates Always Higher After the Last Fed Cut
by David Reed
The trick is guessing which cut will be "the last one"!
Mortgage rates are tied to their respective mortgage bond, which are traded throughout the day.
Mortgage bonds ANTICIPATE Fed moves ... they don't REACT to them.
If the mortgage markets (and other securities) figure the Fed is through with cutting rates that means the economy is most likely on the mend.
A healing economy drives up demand for products and services. A healing economy can stir up inflation.
Future rate moves now mean rate increases. And mortgage rates will hinge not on the likelihood of a Fed move but whether inflation is on the horizon.
Read the entire article at Realty Times:

http://realtytimes.com/rtpages/20071214_ratehighercut.htm

Example:

On December 6, 2007 we saw 5.70% on 30 year fixed no points with Third Federal. Next day it moved to 5.75% then to 5.95% 3 days following. Third Federal was at 6.10% on December 14, 2007, one week later and after the Fed reduced rates Third Federal is my bellwether for interest rates.

Considering a purchase or refinance? Timing is everything in the interest rate game. Generally, no other influences involved, interest rates go lower during the winter months as demand for loans cools. If you are looking for that really favorable interest rate, the next few months might be the best period to purchase or refinance.


Jim Lubinsky
Mary Williams
Re/Max Affiliates
614-766-5330 ext 119