Worst Losses in Dow Since 2001 Bring Mortgage Rates Down Today
15 September 2008
Turmoil in the financial markets today has led to a further decline in mortgage rates. Today’s news that Lehman Brothers has declared bankruptcy, Merrill Lynch has been purchased by Bank of America and that AIG has asked for 40 million dollars in emergency funding from the government has caused the concern that the economy and financial markets are still in bad shape. The Dow dropped over 500 points today in the worst day since 2001. Mortgage rates and the bond market, are the cheif beneficiary and improved today by at least 50 basis points.
Tomorrow is the FOMC meeting, and up until this afternoon there was little speculation that the Fed would hold the line and not increase rates. There is now some speculation that they may back down from their position, and thus potential for more volatility tomorrow.
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