Fed Slashes Interest Rates

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To those saying "lower gas prices" I say this: prices are a reflection of DEMAND...you don't pay for it by not demanding it, they won't charge it, it's Econ 101 people! Why have gas prices fallen? Because in a recession, there isn't as much demand for it...get it??? Quit buying gas-guzzling SUV's and leaving all the lights on in your houses and you will see a miricle...gas prices DROPPING! But, until it HURTS you in your wallet, people NEVER change themselves! The gas companies are NOT the problem...YOU are! Remember that.

Above Posted By: Lawrence | Fri, 8 Feb 2008 00:40:11 EST

I agree that the Fed is a day late and a dollar short, but I also have not seen anyone place blame where is should go in addition to the FED i.e. The mortgage companies who made billions and were flying high for many years. I also think the greedy consumer is also the blame it's a three fold problem. If the government keeps insuring at a higher rate someone is going to have to pay for it and that someone is the public You can't put another bandaid on top of another one and expect it to heal. As a person who has been in the mortgage and real estate business for many years I can tell you without reservation that when things were good the mortgage companies where aggressive to get more money in their pockets If you can breath you could have got a mortgage the problem as I see it is there has to be more accountability on everyones part it is not a one step fix.

Above Posted By: Tim | Sat, 26 Jan 2008 06:18:18 EST

Your right about the gas prices starting this mess. Why doesn't Washington see this is beyond me. Oh I forgot they do see this, but they don't care about you and me until the bottom falls out and they end up looking like idot's. They need to get on big oil companies and have them pull back. They don't need to be making billions and billions each quarter. It's nuts!

Above Posted By: DT | Fri, 25 Jan 2008 20:29:49 EST

Greetings, The general consensus seems to be that these Fed actions are a good thing. While yes, there is a critical problem, and short term actions seem to be needed to some degree, its important not to forget that each of these moves increases the chance that inflation will be more of a problem further down the road. If inflation gets " out of control ", the problems we see now will only be magnified and become even bigger and more complex. The myopic focus on the short term has caused similar economic problems for the past 30-40 years, and these systemic problems will never be resolved by choosing short term pain avoidance fixes. If we continue to have short term govt. intervention fixes ( which really do not " fix " anything, but rather are like band-aids. ) we will only prolong the inevitable, and likely make it worse in the long term. SpyBoy

Above Posted By: SpyBoy | Wed, 23 Jan 2008 09:43:21 EST

Bernanke has taken too long to repair the real estate housing damages, consumer spending, economy through lowering the Feds Rate. Even though the rates have dropped tremendously, no ones making money like they were 2 years ago. Equity Crunch, Credit Crunch, Liquidity Crunch!! You name it, its going on. We are in a recession people, may be even a depression. Tighten up Ben!!!!

Above Posted By: Paul D | Tue, 22 Jan 2008 20:45:46 EST

The blogger that stated that the Fed needs to insure loans upto 650,000 so that consumers holding Jumbos can benefit from a convential loan interest rate is right. This would stimulate the economy and help with Mortgage companies as there would be a rush to refinace the Jumbo ARMS.

Above Posted By: William | Tue, 22 Jan 2008 17:21:28 EST

The market will continue to fall if they do not fix that which caused the problem and those that indorsed it. It will help anyone needing a new loan or a refinance but what about us poor suckers that got duped into a loan by greedy bankers that knocked on our doors and told us that a refinance was in our best interest, and in my case, to pay off unsecured debt owed to the same lender. Lending laws really don't mean much when you have the federal goverment covering your back. Jim Chambers

Above Posted By: jim chambers | Tue, 22 Jan 2008 17:08:55 EST

I appreciate the effect of the Fed discount rate on the economy. In terms of consumers, it will affect their credit card and auto accounts. I also appreciate how Mortgage News Daily dutifully reports changes to that rate but why not track changes to the LIBOR rate just as as well... it is this rate that is most directly tied to our mortgage market. Additionally, especially with the whole of the economy in its downward spiral, it doesn't matter what the mortgage rates are. They have been and remain very low and there are still great deals to be had in real estate. If conforming loan limits are raised, then there will be even many more great deals (for conventional/good credit deals). But if consumers are unable to afford a proper downpayment because they are struggling with their gas, food, utility and existing credit costs, etc., they are not going to even think about buying a home. And if the mortgage insurance companies begin to collapse (as has been cautioned by many leading money managers in the nation), then its all over... of course I don't hear anybody in Washington discussing this.

Above Posted By: A. Snyder | Tue, 22 Jan 2008 15:36:53 EST

As far as I am concerned the Fed is admititng it is at fault and is the author of the current mortgage market crisis. They had to know well in advance of the 13 or so .25 short term rate increases eventually would destroy the subprime market - as these rates have strong influence on the calculation of ARM rates. If they claim otherwise, They should not have been on the Fed Board to begin with.

Above Posted By: George Carter | Tue, 22 Jan 2008 15:33:40 EST

Greed, Greed, and more Greed. Not just the loan officer or mortgage companies. Oil companies also. However, our government gives out money anyway they can it seems. I heard someone say something the other day, that really makes sence to me and should to the government also. "People that apply for a job or that work for an employer are all subject to mandatory drug tests. The answer to evaperating social security funds, etc., and to put drug dealers out of business, is to have everyone that applies for welfare, food stamps, SSI, aid to dependant children, etc.,should be tested for drugs also. If they are positive, then the government should not pay for their habits." A little morality and common sense goes a loan way.

Above Posted By: Sondra | Tue, 22 Jan 2008 14:34:24 EST

Cutting rates will only help the current consumers purchasing homes in today's market in the long run. The rate decrease takes a minute to trickle down to the average consumer. Another soultion would be to increase the conforming limit to at least $500,000 so consumers can get a decent conforming loan in areas with a higher cost of living. Jumbo loan rates are still high an dhard to acquire. I do agree they should also focus on the gas prices but we know they won't because Bush is not only in bed with foreign oil he also washes up with it!

Above Posted By: RaeLa | Tue, 22 Jan 2008 14:29:28 EST

Rate cuts will have little effect at this time. The American consumer has lost most their net worth due to declining home values. They have no equity so rates dont matter. Continuing foreclosures continue to clobber the market. Credit card debt is next and it will be big.

Above Posted By: MARK | Tue, 22 Jan 2008 12:02:57 EST

If you really want to see the American economy take off, lower gas prices are the key. "It's the gas prices, Stupid"

Above Posted By: Bill | Tue, 22 Jan 2008 10:00:29 EST

Fed Slashes Interest Rates

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