Come 2:15pm ET on Tuesday (September 16th), we’ll have a decision on if the Fed Funds Rate (FFR) will stay the same or change. Remember, the FFR doesn’t impact mortgage rates directly, but it often influences traders opinions on the market.
What’s Likely to Happen?
I have to say, without the heads up from Alex Stenback, I wouldn’t have really noticed. If you don’t follow him on Twitter, you probably should. He’s a great mortgage professional out in the Minnesota market. With that said, Alex pointed out that the Fed Fund Futures was looking like 100% probability of a rate cut. I had no idea it was even being considered till he pointed it out. I guess the question is more so, how much will they cut? Again, this is based on futures which are a moving target.
Why Are They Even Considering It?
If you would have asked me last week if the Fed was going to make any movement last week, I would have said absolutely no. You’re crazy. After what’s happened in the past couple of weeks though, they might feel compelled to make a move. My personal opinion (which doesn’t matter at all) is that they are sending the wrong signal by cutting. But the group over at the Fed is much smarter than I am when it comes to fiscal policy.
Want to Find Out What Happens?
If you’re as anxious to hear what happens like I am, you can follow me on Twitter. I’m sure I’ll be tweeting it before the associated press even releases statements (technology is a beautiful thing). I think now, more people are wondering how the markets will react to the news of a rate cut. After loosing over 500 points on the DOW today (Monday), Tuesday will automatically be an interesting day.
Follow me to find out more as it happens. It promises to be an interesting one.