Posted on 12/16/2008 11:35:21 AM PST by Sub-Driver
Fed Cuts Rates to Historic Low
By BRIAN BLACKSTONE and MAYA JACKSON RANDALL
WASHINGTON -- U.S. Federal Reserve officials on Tuesday slashed official interest rates to an historic low range to combat a deepening recession and signaled they will keep rates "exceptionally low" for some time amid rapidly waning price pressures.
Officials also signaled a new phase for policy in which lending programs financed by the Fed's ballooning balance sheet, a process known as quantitative easing, replace the federal funds rate as the Fed's primary policy tool.
The Federal Open Market Committee voted unanimously to reduce the target fed funds rate for interbank lending from 1% to a range of zero to 0.25%, the lowest since the Fed started publishing the funds target in 1990. The market-determined effective fed funds rate already has already hit record lows in recent weeks. (Read the Fed's statement.)
Economists had expected a smaller cut of just 0.5 percentage point, and hadn't envisioned the Fed setting a range.
(Excerpt) Read more at online.wsj.com ...
The dollar is going to be worthless.
going to be?...............
They can’t cut rates much further, can they? That particular quiver is now empty.
Quantitative easing...Fedese for “gas up the choppers.”
how will this affect mortgage rates??
When it hits ZERO, can I refinance my mortgage for free?..........
All right all you experts. What’s this going to do for Mortgage rates and the ability of people to refinance?
If it gets much below 6% on the street I’ll refinance..........
0.5% 0.25% 0%. I mean, really, what’s the difference? Pushing on a string is still pushing on a string. It doesn’t matter. Not until the Fed starts paying people to take their money. But the opposite is happening. Right now people are paying the Fed to take their money, with negative yields on short bonds.
Of course, the market bumps up on a non-event. It will give it all back by week’s end. With today’s market volatility, +250 pts is a yawner.
Lamh Foistenach Abu!
I just locked in 4.85. Down from 5.50
If they could take it down to 4-4.5% on a 30 year fixed, can you imagine how much money would begin to flow into the economy.
I did for 5 3/4..........
.....................sigh.
Um... Isn’t that the plan? Tank the dollar. Reflate the bubble. Rinse, repeat. Of course they are trying to destroy the dollar’s value. That is the game plan to reflate and stave off deflation. Not that it will work... Nobody knows if it will work.
If that was a 30 year fixed, can you share the name of the lender?
"Notify our constituents and lobbyists that the minimum kickback
to each of us in now two billion dollars."
Hey, it worked for Japan!
Oh, wait a minute...it didn’t.
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