Will the Fed rate cut make a difference?

[sweeps]

rooskers: I understand what you're saying, but I tend to disagree. It may have made banks more willing to lend, but that in and of itself wouldn't push down long-term rates. Long-term rates are going down because (a) the general view of the economy is worsening which removes worries about inflation and (b) banks believe the Fed will start aggressively buying Treasuries and other long-term bonds which will increase demand and lower long-term rates.

Short-term and long-term rates can go down at the same time, but it's usually not a causal relationship.

[rooskers]

Sweeps maybe I am not really stating what I mean clearly.

Rates were going down not because the fed lowered rates or because they were more willing to lend. Rates were going down because of both a) and b) of what you said. However even if rates were going down it didn't help anyone because banks were still not willing to lend the money. Now that the fed has lowered rates banks seem to be a lot more willing to lend to consumers. My point was now people can refinance because not only are long term mortgage rates going down but now banks are willing to lend the money because the fed rate has gone down as well.

However in my case and in many peoples case the situation is meaningless because I am upside down on my loan. Not only am I upside down but I can also afford my loan. If I wasn't able to afford it I could get help through various programs including government ones. So even though the government has somewhat unfrozen the markets by lowering the rate and simultaneously long term mortgage rates have decreased I am out of luck.

Short-term and long-term rates can go down at the same time, but it's usually not a causal relationship.

That is why I said it was a unique situation

[MoneyTrev]

Nope, fed cuts won't make a difference.

Tell those banks to lend out their money!