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The Federal Reserve announced an emergency rate cut of 50 basis points (half a percentage point) today in response to the threat from the coronavirus outbreak. It's the first time they've made a half point cut since 2008. Good news for borrowers; bad news for savers.
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Steve
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Wow. That's pretty aggressive. I know all of the major central banks had a conference call today about all of this -- did the other world banks all take similar actions? (Sorry, I haven't trolled the news yet)
Happy to have the opportunity for lower mortgage rates come April when we start messing with getting a new mortgage..... but it's always worried me a bit that the Fed funds rate is still riding so low (now down to ~1% I think?), that they really don't have much room to run if things don't recover as hoped. -
It didn't seem to have the desired affect (so far, anyway). I think we might be in for a roller coaster ride before everything settles down again.Comment
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They didn’t lower rates to make the stock market go up. Furthermore, Washington needs to quit worrying about the stock market. It doesn’t need government tampering. It is the free buying and selling of company shares. There should be no attempts to manipulate it.Comment
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I'm trying to decide if I should apply for a refinance now or if the mortgage rates are likely to drop again soon. Not sure if I should wait or not!Comment
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Saw on bogleheads someone commented that this applies to short term interest rates; whereas mortgage rates are more closely tied to long term.
something like that. I’ll continue keeping my eye on the rates at my credit union.
if 30 year goes below 3% I’m wondering if the rules change at all as far as choosing a 15 vs 30 year mortgage.Comment
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Just when I was going to buy more bonds. Oh well, time to buy stock market dip instead.Comment
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That's true. But over time, as go the short-term rates, so follow the long-term rates. There just may be a lag of a few weeks between when the short-term rates change and when the long-term rates start to adjust accordingly.Originally posted by Jluke View PostComment
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Mortgage rates are loosely tied to 10 year treasuries. The Fed Funds overnight rate is a completely different animal. 10 year treasuries might or might not drop further, depending on how much tampering Uncle Sam does.Originally posted by breathemusic View Post
All of this manipulation by our government to try to prevent any bloody noses should make all of us very nervous. Free markets aren’t supposed to work that way. Do we really want our government controlling the economy and the stock exchanges? We need to think through that. If my Apple shares are crashing, is that really the Fed’s problem to resolve?
Last edited by TexasHusker; 03-03-2020, 05:30 PM.Comment
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Trump cares more than any other president since the stock market number is his strongest argument for the 2020 election. Having a crash market this year may seal his fate.Originally posted by TexasHusker View Post
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If the market falls further, the 10 year treasuries will drop further. If the market miraculously rebounds, treasuries will jump. Rates are going to oscillate just like the market. Some experts are saying that with 10 year treasuries sub 1%, mortgage rates should be even lower than they are now, but they aren't because of the current refinancing demand. Lenders reluctant to drop as far as it probably should be.Originally posted by TexasHusker View PostComment
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I contacted my bank rep yesterday afternoon.
She's running some numbers for me to see if a refi in the near future would make any sense.
BrianComment
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savers in low risk investments like CDs and savings accounts, yes.Originally posted by disneysteve View Post
But, probably good news for savers who own dividend yielding stocksBrianComment
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On Monday, I talked to my lender.
She ran some numbers for me: This is my current situation.
Current loan balance:$335,500 @4.25 with 25 years left.
I mention to her that we wanted to see what rates was for 20 years.
She said that she can lock in 3.125% for 20 year mortgage and that our monthly mortgage would go up around 100 dollars or so, which we can afford easily.
She can lock in that rate for 60 days. I believe closing cost is 2500 give or take.
We're excited knowing that we can save a whole 1 percent if we refinance. Will save us on interest over the loan plus finish 5 years earlier.
my question is: Since she can lock the rates for 60 days. Should I wait to see if rates goes lower? or should I just jump on it now?
We are doing our homework so we understands the in and outs. Any question we should ask?
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