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Fed Rate Cut: Hoping To Making An Impression

The Federal Open Market Committee held an unscheduled meeting on Tuesday [1]. Thank goodness for the timing of MLK day this year, as a federal holiday. The Fed was able to see the Asian markets imploding on Monday and were able to pre-emptive take action, rather than being behind the curve.

The WSJ’s neat interpretation is called Parsing The Fed [2].

Investors are betting that the Fed will drop rates [3] another 50 basis points at their next meeting next week.

We may see a mini-refi boom in the coming months, but I am skeptical we will see a surge in sales activity across the country as a result of lower rates. The problem still remains with the credit markets and its unlikely for housing to recover anytime soon unless the relationships or price/risk is fixed.