Fed Acts to Reduce Interest Rates

by James & Miel on March 18, 2009 · 0 comments

Hi All,

Okay, so here is some relevant news for everyone who is considering refinancing. The federal reserve has committed to buying over $1.25 trillion worth of securities. Observers suggest this could lower mortgage interest rates by .25 to .5% in the next few days. The nationwide average is currently at 5.12%.

The $1.25 trillion would purchase approximately 50% of all the new loans originated in the US this year (1,2). Since they are buying such a huge amount of loans, its a good bet the feds efforts will be successful.

While bank lending standards have tightened, this is still good news for people who are refinancing or are first time buyers. It could definitely help your wealth if you take advantage of this opportunity.

Update: the blogsphere has largely weighed in on the Fed’s move. By and large reactions have differed from yours truly, most bloggers hate Bernanke’s decision. Click here to see what others are saying.

Thanks,

James

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