Fed Cuts Benchmark Rate Only .75%, Mortgage Rates Up
18 March 2008
The Federal Reserve disappointed the street today with a weaker than expected .75% cut to the rates. As a result, bonds are selling off this afternoon, and mortgage lenders may experience a repricing for the worse this afternoon. If you are floating, it may be a good time to lock your rate, if the reprice has not yet occurred.
In addition to the anemic rate cut, the PPI for February was released with a stronger than expected reading for inflationary pressure at the level of the producer. This is also bad news for mortgage interest rates.
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