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Irvine Mortgage - Federal Reserve chairman Ben Bernanke is currently in a meeting to announce what is expected by investors to be a Fed Funds interest rate cut, among other topics like the state of the current US economy. Whenever you have big changes being made on high levels like at the Fed, you can expect mortgage rates to change, but not always in the most obvious fashion.
If you’ve read my article about how mortgage rates are determined, you know that a lot of the cause behind the Mortgage Market turmoil we’ve been having is due to nothing more than investors’ ideas about what may or may not happen in the future, however irrational those ideas may be. The same thing is going to happen today, but I predict that, in the event Irvine Mortgage Rates rise slightly, they’ll come back down to normal levels within a few weeks, and vice versa.
CNN Money states that investors aren’t completely in agreement on their predictions of the size of the rate cut, some think the rate will be cut by only 0.25%, and some 0.5%, also known as 25 and 50 basis points, respectively. Investor expectations are, in large part, what drive short term fluctuations in mortgage interest rates, so, if the Fed lowers the Funds Rate by only 0.25% we’ll have a lot of disappointed investors, and that will likely cause mortgage rates to rise slightly, but I predict it’ll only be a temporary change.
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