Posted on 03/15/2020 2:47:15 PM PDT by Kaslin
During a press conference on Sunday, President Donald Trump announced that the Federal Reserve is taking drastic action to cushion the economy from the Wuhan coronavirus outbreak that has become a pandemic. According to Trump, the Federal Reserve will drop the interest rate to near zero.
"The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent," the Federal Open Market Committee said in a statement. "The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee's symmetric 2 percent objective."
From the Wall Street Journal:
The Fed will buy at least $500 billion in Treasury securities and $200 billion in mortgage-backed securities over the coming months to help unclog markets that grew dysfunctional last week, the central bank said. It said it would initiate the program, called quantitative easing, on Monday.
The Fed said it was activating swap lines with five other central banks, including the European Central Bank and the Bank of England, to smooth out disruptions in overseas dollar-funding markets, effectively encouraging foreign central banks to use existing facilities to supply dollars to their own financial systems.
The central bank also announced a series of steps to boost lending, including by lowering the rate charged to banks for short-term emergency loans from its discount window to 0.25% from 1.75%. It said it would encourage banks to tap their capital and liquidity buffers to lend to households and businesses affected by the coronavirus.
Does anyone know what this means for mortgage lending rates?
TIA.
.
Where might mortgage rates go?
Well that will drive the middle class down a little more Donald. Pull out the little steps on the upwardly mobile ladder.
Real Conservatives just don’t do that.
And no, I am not a never Trumper nor a troll nor a lib.
I am a classical conservative with an affinity for the middle class who carry this country on yheir backs.
Shame on Trump.
This is a full point cut, and really brings the manipulators at the Fed in line with the market.
One reason the stock market selloff was so dramatic is they kept rates above the market for way too long.
Well that will drive the middle class down a little more Donald
...
No it won’t. The funds rate was above the market. It’s now in line with the market.
Your blame should be going to the Fed for keeping rates above the market for too long.
Well that will drive the middle class down a little more Donald.
***********
Explain that statement please.
“Where might mortgage rates go?”
They will go in the same direction as the 10 YR Treasury Bond.
We need to establish another strategic reserve (like we did for oil during the shutdown) for toilet paper.
Perhaps we can get lock limit up and lock limit down in the same session?
The only prediction anyone can make is that this should drive gold up like mad. (of course, it was down over $70 Friday)
I bot a load of GLD calls on the dip.
I Don’t think this is going to help at all. This economic slowdown is due to unusual circumstances.
This temporary we all know this, this is to calm the markets and the economy down until April and this bullsh## is over
Please look at recent history. Obama kept interest rates low, essentially allowing banks to use others money, usually the middle classes money, free.
The middle class suffered.
Disagree. The market is not the determiner except in the minds of rapacious capitalists who are not conservatives.
It is not classical conservatism to allow the rich to use others money for free.
Why? What will that do? More long term mortgage disasters. Do we ever learn? We become more stupid as time goes by.
Did you notice Futures tanked 1,000+ points on the news?
They’re panicking. And in the meantime are cratering our markets further.
Thanks. Yes suffering will a part of this situation for sure. Not only the sick but also the economy will see
some impact as the world tries to get back to normal.
Take care.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.