The Fed dropped rates another half percent yesterday. “Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity,” the Federal Open Market Committee said in a statement Wednesday.
Does this mean home mortgage rates will drop? NOPE! As I have explained before, The fed rate cuts do not directly impact mortgage interest rates, but it does impact homeowners with equity lines of credit (HELOC), people who carry credit card balances and other short term loans. Sometimes these rate drops actually cause home mortgage rates to increase slightly.
The Fed is hoping consumers will spend money on their credit cars, or use their HELOCs, which pumps money into our economy.
What’s next? Waiting to see…