Feds Cut Rates For The Third Time This Year
This ARTICLE Is About The Feds Cuts Rates For The Third Time This Year As Economy Slows. Mortgage rates started to drop from the beginning of 2019. When the Federal Reserve Board cuts interest rates, mortgage rates follow the downward trend. Breaking news today on Feds Cuts Rates For The Third Time This Year As Economy Slows and the fear of a recession lingers.
Mortgage Lenders were not sure about which way the Feds was going to go. Many expected interest cuts by the Feds. However, others expected the Feds would not touch rates and interest rates would remain at the same level.
Mortgage rates are expected to go lower with today’s breaking news. In this article, we will cover and discuss the breaking news of Feds Cuts Rates For The Third Time This Year As Economy Slows and fears of a recession lingers. In this breaking news article, we will cover about the Feds cuts rates for the third time this year as the economy slows.
Breaking News Of Feds Cuts Rates For The Third Time This Year
In this paragraph, we will discuss the news of the Feds Cuts Rates For The Third Time This Year and what this means to consumers. For the third time in 2019, the Federal Reserve Board cut interest rates by 25 basis points to a range of 1.5% to 1.75%. The Feds cut rates two previous times this year. Each time, the Feds cuts rates by 25 basis points.
The central bank cut rates this time around to get ahead of a potentially slowing economy. Economists and experts of monetary policy said this third rate cut was mixed.
Some expected the Feds would not cut rates this year while others expected a final interest rate cut to finish off the year. Other concerns by the Feds besides a slowing economy was a recession and trade tensions with China that may negatively affect the U.S. economy. Alex Carlucci said this third rate cut for this year was a preventative strategic measure to keep the economy healthy with no setbacks.
What Lower Interest Rates Mean For The Economy
Lower interest rates set by the Federal Reserve Board is positive news. Lower interest rates mean more money is flowing into the economy. Companies will invest more money with lower rates. Consumers will buy more goods and services with lower rates. Money is freed up which means more spending overall. More spending means more demand for goods and services. Lower interest rate is generally a positive for many.
Lower Interest Rates Benefits Homebuyers and Homeowners
The federal funds rate does not have a direct impact on mortgage rates, which depend on the 10-year Treasury yield. However, mortgage rates normally follow the Fed fund rate and move in the same direction. Bad news in the economy normally means lower mortgage rates. Great economic news normally means higher mortgage rates. What Experts Say About Feds Cuts Rates: Lower interest rates mean low mortgage rates for homebuyers and homeowners needing to refinance. Homeowners with adjustable-rate mortgages can take advantage of low mortgage rates to refinance into a 30-year fixed-rate mortgage.
Taking Advantage With Today’s Low Mortgage Rates
Homeowners with bad credit and lower credit scores may want to try to boost their credit scores to take advantage of today’s low mortgage rates. Other homeowners with underwater mortgages may not be able to take advantage of today’s low mortgage rates. Mortgage rates are substantially lower today than they were before the 2008 Credit Meltdown. Mortgage rates on a 30-year fixed-rate mortgage prior to the Great Recession of 2008 were at 6.74%.
Today’s par mortgage rates on a 30-year fixed-rate mortgage are at 3.5%. Interest rates on home equity lines of credit (HELOC) or second mortgages follow the federal funds rate.
If the Fed Funds Rate drops, so do interest rates on HELOC’s. HELOC’s are linked to the prime rate. The prime rate is the interest rate banks charge their best borrowers. When the Feds changes rates, the prime rate follows in the same direction as the Feds Fund Rate. A recession or weakening economy can lower mortgage rates further. Any signs of weakness of the economy mean great news for low mortgage rates. This is a developing story on Gustan Cho Associates Mortgage News. We will update our viewers as further news develops on interest rates and mortgage market economic news.
