No Fed rate cut announced today leaving traders to scratch their heads in disbelief. A Fed rate cut was overwhelmingly expected by the Street due to the liquidity crisis in the last few days with AIG and Lehman Brothers creating a demand for dollars.

Fed Rate Cut Did Not Materialized

The Fed decided to keep rates at the 2% level saying “strain in financial market have increased significantly and labor markets have weakened further.”

It seems Bernanke realizes the market needed a pause from shocks to the system. Their was speculation a Fed rate cut would signal more concern about systemic weakness in the financial markets and Bernanke did not want to send that message.

This is good I think for the mortgage rates and mortgage refinancing moving forward. Stability right now is more important than stimulation in either direction.

This is good I think for the mortgage rates and mortgage refinancing moving forward. Stability right now is more important than stimulation in either direction.

Good Luck!

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