Impending Rate Cuts: Good News for Real Estate Market?
Are predictions this morning that the Federal Reserve will cut the federal funds rate by up to 3/4 of a percentage points in the coming weeks likely to have much impact on the local real estate market? While a reduction in the Fed’s benchmark rate is no guarantee that longer-term rates and, by extension, mortgage…
Are predictions this morning that the Federal Reserve will cut the federal funds rate by up to 3/4 of a percentage points in the coming weeks likely to have much impact on the local real estate market? While a reduction in the Fed’s benchmark rate is no guarantee that longer-term rates and, by extension, mortgage rates will drop and a Fed cut won’t necessarily make it easier to get a mortgage in the wake of the sub-prime crisis, there’s likely to be some psychological boost to the market. In New York, it seems like good timing given that those bonus checks will start clearing in the next couple of weeks. Think it’s meaningful or a lot of hot air?
Fed Chief Signals Further Rate Cut [NY Times]
I got a cheap, fixed-rated mortgage when rates were rock-bottom in 2003. If the Fed continues this inflationary policy, I’ll have a negative interest rate on my home.
“I don’t understand why people believe that Wall Street bonuses drive the NYC market when half of them don’t even live in the city. Many bankers live in Westchester and CT.”
For the WS folks who don’t live in the city, the city is where they keep their piece on the side.
Deflation is not necessarily a bad thing. It is only bad in economies based on fractional reserve lending, as debt is created by devaluing existing currency in circulation.
Deflation is actually the necessary result of technological progress. Technology directly results in cost savings, which in a competitive environment should be passed on to consumers.
The banking system may very well collapse, but we aren’t going to have massive repossessions or anything – that would lead to total chaos.
Perhaps this is our chance to finally sweep the banksters and usurers off the temple mount and begin anew.
martis,
what firms are you talking about?
I don’t understand why people believe that Wall Street bonuses drive the NYC market when half of them don’t even live in the city. Many bankers live in Westchester and CT.
I think this rate cut is not going to affect anything. People are already reeling.
“Dollar will fall even further, Chinese will pull out their their financial investments; ”
Not so fast. I think the dollar will rally this year also the Bond Market say “Fuck you, Pay Me”! People are going to need cold hard cash to do things with and will refuse to pay high asset prices (deflation).
To the assholes The FED does NOT control interest rates!!!!!! They control overnight rates between the 22 banks in their system. The Bond market set rates!!!
When the assholes get tired on low return or high inflation on their money, Rates will go to the moon.
The FED cannot save asset prices because people cannot service their debts anymore. Joe 6 pick and Chuckie is out of money. Look at Japan in the 90’s they had 0% rates and people didn’t want the money!!! You cant force someone to loan you money and the Banks will use low interest rates to shore up their reserves.
Understand!!! We are in a world of fucking shit and I think we have a DEPRESSION on our hands. A fucking shit storm of DEFLATION!!!!
We are fucked.
The What
Someday this war is gonna end…
We don’t need further rate cuts. It weakens an already weak dollar.
We need to let the markets do their thing right now.
My BONUS check bounced. WTF!!!
All of the above PLUS the cost of healthcare and oil will be two more anchors on recovery.
Those bonus checks are going to be ALOT smaller this year. Major layoffs across Wall Street firms are scheduled to start next week. Its gonna be BAD people.