St. Louis Real Estate - Mortgage News - Big Nothing

A Big Nothing! by Chris Scheer, District Manager, Cornerstone Mortgage, O’Fallon, MO

Well the Federal Reserve cut interest rates by another .5% today which makes 1.25% in the last 10 days. What did Wall Street do? They acted excited, but by the end of the day the DOW was down 37 points. The bond market was even less excited and there was almost no movement at all. Why is the big question?

I would love to tell you that I know the answer, but I don’t.

Here is my best guess as to what will happen over the next 30 days. As the heavy money has a chance to digest the Fed comments and view the rest of the economic indicators that are coming out this week they will determine in what direction the market will go. This week will still be a week with potentialy wild movements in both directions for mortgage interest rates. As the market recognizes that the Fed may have to take further action, positions on the bond market will be taken and we will see the 30 year fixed get down to 5.5% or possibly below.

Here are the economic indicators that are coming out this week:

1/30 Gross Domestic Product (Advance) (BEA) 2007 Q4 8:30
1/31 Personal Income (BEA) December 8:30
Construction Put in Place (Census) December 10:00

For more you can go to http://www.economicindicators.gov/

If you have questions or comments about this please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

This entry was posted on Wednesday, January 30th, 2008 at 4:14 pm and is filed under Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.