Tag Archive for: fed funds rate

Fed Holds & Rates Fall: How Jobless Claims, Productivity & BLS Reports Impact Mortgage Rates; Inflation’s Over

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Rates fell again this morning in response to negative labor market news and positive productivity news. Initial and continuous jobless claims came in higher than expected today along with more layoff announcements from the likes of UPS (12,000), Salesforce (7,000), and Microsoft (3,000). Bond investors are of course very leery of all these numbers, as they understand that layoffs are always the final shoe to drop once we’re in a recession and this this could just be the beginning. Labor market productivity improved too – and that is huge! Productivity refers to the total amount of output relative to total hours worked – and it is something America is particularly adept at improving. It is extremely important because improved productivity is another indication that inflation will be tamed, as labor costs are a major component of inflation.Read More

Why The Fed Must and Will Lower Rates!

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I frequently remind readers that a recession is likely and that the Fed will lower the Fed Funds rate when the recession hits. The Fed will do this to revive lending, to make borrowing costs cheaper, and to stimulate the economy overall. The risk of doing so will be more inflation, but the Fed will likely have no choice if it wants to keep the economy from completely collapsing.Read More

Fed Raises Rates; Mortgage Rates PLUMMET; Why? JVM’s Here to Stay!

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JVM was officially founded in 2006, and effectively founded in 1999 under another name by my wife, Heejin – with much of her operation carrying over to JVM in 2006. All this is to say that we are definitely here to stay, as we have ridden through several very serious downturns with nary a scratch, and we are now stronger than ever.Read More

Europe Raised Rates By 1/2%, and Rates FELL

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The European Central Bank (ECB) raised its short-term rate (its equivalent to the Fed Funds Rate that the Fed raises here in the U.S.) by a full 1/2% yesterday. It shocked many observers because Europe is facing a banking crisis that is potentially much worse than what we face here in the U.S. (for reasons I won’t go into for brevity’s sake).Read More

The Fed Does NOT Control Interest Rates! Follow the Data Guys!

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  The Fed raised “rates” last year at the fastest pace in history! There were 7 “rate” increases in total: 0.25% in March 0.50% in May 0.75% in June 0.75% […]Read More

The Fed Did NOT “Raise Rates 3/4% Yesterday” – Deflation/Lower Rates Coming Soon Part II

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The Fed raised rates 75 basis points or 3/4% yesterday – so my rate quote at the bottom of this blog went from 6.0% yesterday to 6.75% today. FALSE!! THAT […]Read More

The Fed Raised Rates And Something VERY UNUSUAL HAPPENED!

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The Fed raised the Fed Funds Rate yesterday by 0.75% and long-term rates actually increased (a lot) after the announcement. This is very unusual for several reasons: The markets had […]Read More

The Fed’s Raising Rates 3/4%! OMG! CoreLogic Predicting 4% Home Appreciation Still!

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The Fed let it be known yesterday that it will definitely raise the Fed Funds Rate by 0.75% on September 21st… and the market yawned. As Barry Habib reminded us […]Read More

History Of Interest Rates Part II (50 Years; 1 Year); Perspective Again!

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Several agents have recently requested updates to the History of Interest Rates/Perspective blog I wrote in early May. They of course want to show clients that today’s 4%-ish (jumbo) and […]Read More

Rates Went Way Down Because Rates Went Way Up (AGAIN)

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The Fed raised the Fed Funds rate by 0.75% yesterday as expected, and long-term rates have been falling ever since. I would not beat this dead horse again but for […]Read More

The “Fed” Does NOT Control Mortgage Rates

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The Fed controls the short-term “Fed Funds Rate,” or the overnight rate that banks charge each other. The Fed does NOT control long-term rates like the 10 Year Treasury or 30-year mortgage rates. The Fed can influence long-term rates with its comments and by raising the Fed Funds rate, but it does not have the final say.Read More

Fed Raised Rates & Mortgage Rates Fell – Before Rising Today

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The Fed raised the Fed Funds Rate 75 basis points (0.75%) yesterday, and mortgage rates largely fell in response to the news.Read More

Why Did Interest Rates Fall After The Fed Ostensibly Made Them Rise?

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The Fed recently raised rates, but interest rates fell in response. This is something we see so often that I had to blog about it – to again allay some […]Read More

Mortgage Rates Do Not Equal 10-Year Treasury Rates

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The 10-Year Treasury Yield dropped almost 4/10% recently – so why didn’t mortgage rates drop that much? The 10-Year Treasury yield (interest rate) is a reflection of what it costs […]Read More