As I woke up and examined the headlines, I could not help but laugh. The thesis shared by many students of economics, including myself (I’m not the best student), seems to have been upheld this morning – the Fed is now reacting to the markets not to economic conditions.
The only different between today and 2 weeks ago was the response of the markets – the Fed decided to lower rates as a response to this (they will claim I’m sure, that it was done to bolster confidence and avoid recession) and it worked somewhat. Markets are rebounding.
In the meantime, and closer to home, consider putting your mortgage broker on watch – rates hit 5.37% or so today according to CNBC, and this could prove to be another chance to LOCK IN a 30 year mortgage at a low rate. And if you were one of those cuckoos who used the low rates to cash out and buy too much stuff (you know who you are) here is a second chance to get bailed out – and I hope you choose the right path this time. I still think, as I’ve told friends and clients for some time now, we may see 5% or lower…