Market Commentary for this past week- 1/21-1/25 2008 - Mortgage Rates
for any of you that were watching the market this week, you saw history being made, in multiple areas. we began the work week on Tues morning with the Fed doing two
extremely uncommon things, making a Fed Funds rate cut between meetings
and dropping the rate 75 bps. the Feds move was in reaction to the steep drop in overseas stock markets and the anticipation of our own DJIA (Dow Jones Industrial Average -or Dow Jones) opening up
500 pts down.
the following day, Treasury bonds opened up so strong that in the morning offerings, you could find 30 yr fixed mortgage rates at 5.25 -5.50%. late the same day, the Dow had a huge rally, Treasuries fell off a cliff (figuratively) and 30 yr rates were back up to 6.00% by 4 pm. btw, that is an amazing swing in Treasuries and mortgage rates for just one day!
mortgage rates have stabilized (I use that term very loosely) at last week's levels. however, the Fed's next scheduled meeting is next week, Jan 29th and people in the know are anticipating another cut in the Fed Funds rate, possibly another 50 bps. If that does happen, you will see fluctuations in the stock and bond markets similar to this week.
And we're ending the week with the White House and the House agreeing on a possible $150 billion economic stimulus package. the deal must go to the Senate, which really wants to add their own 2 cents, well $50 billion really, to the package. the Senate will really be under a lot of political pressure to just approve the deal and do it now. so that will be an interesting drama to watch unfold.
and all the while the rest of us focus on taking care of this month's bills. what a country.