Can Anyone Explain the Feds??

[Dixiechick]

Re: Can Anyone Explain the Feds??

"Now the 30-year benchmark mortgage rate stands at about 6.75 percent, compared with under 5.5 percent two years ago."

WOW! My first mortgage was about 9.5% and that was good back in '89!! And my salary was 1/4 of what it is now. To think 6.75% is getting high --- no, the houses are over priced and people can't unload them when the rates go up...

Dixiechick

[SuzeOFan]

Re: Can Anyone Explain the Feds??

WOW! My first mortgage was about 9.5% and that was good back in '89!! And my salary was 1/4 of what it is now.To think 6.75% is getting high --- no, the houses are over priced and people can't unload them when the rates go up...

Are you saying we're spoiled and shouldn't complain?

[Dixiechick]

Re: Can Anyone Explain the Feds??

"Are you saying we're spoiled and shouldn't complain?"

Oh no, I complain just as much as the next person. But, rates today aren't bad even though we've had them better in the past. There are those who are glad to see the rates go up (a little bit) - CD holders for example (I'm one of those). Unless you carry much debt or are in the market for buying a house, these rate increases shouldn't affect you day to day. I've seen the effects of gas increases on my pocket book more so than the fed. reserve rate increases... But that's just me...

BTW, how do you get the little quote boxes???

Dixiechick

[sweeps]

Re: Can Anyone Explain the Feds??

how do you get the little quote boxes???

Click the Quote button next to the person's post.

The person's post will appear within [ QUOTE ] [ /QUOTE ] tags. You can edit as necessary.

[Dixiechick]

Re: Can Anyone Explain the Feds??

Click the Quote button next to the person's post.

The person's post will appear within [ QUOTE ] [ /QUOTE ] tags. You can edit as necessary.

Thank You!!!

Learning something new everyday...

Dixiechick

[Ima saver]

Re: Can Anyone Explain the Feds??

Thank You!!!

Learning something new everyday...

Dixiechick

Thanks dixiechick, I just learned it too!!

[SuzeOFan]

Re: Can Anyone Explain the Feds??

(June 29, 2006) Mortgage rates climb on inflation fears:

http://news.yahoo.com/s/ap/20060629/ap_on_bi_ge/mortgage_rates

"Financial markets continue to expect more rate hikes by the Fed over the next six months, which has added upward pressure on mortgage rates," said Frank Nothaft, Freddie Mac's chief economist.

"With higher interest rates, the housing market has begun a gradual and orderly reversion towards historical norms," Nothaft said. "New construction, home sales and house price appreciation have all been slowing over the past few months."

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*historical norms* ???

(As in like what Dixiechick said ....9.5% ....as a good 'normal')

I still need to know why the government thinks this is this a good thing??

And for *whom* is it a good thing? !

Anyone?



(P.S. - To make a quote box, copy your quote then select the last little icon image on your screen. Past your text into the pop up. Wa la!)

[sweeps]

Re: Can Anyone Explain the Feds??

Well, in general, higher interest rates are bad for net borrowers but great for net savers. If someone's overextended themselves with credit, they'll definitely be hosed. But many people who rely on interest income (retirees, for example) love higher interest rates.

And as msnln pointed out, the last thing that anyone wants is runaway inflation. Higher interest rates are an attempt to keep that from happening.

IMO, even more of an issue than rising interest rates is the uncertainty of rising interest rates. I'm in the minority that believes we should raise a full half point, and then be done with it. A lot of nervous energy is being wasted worrying about the Fed.

[msnln]

Re: Can Anyone Explain the Feds??

"With higher interest rates, the housing market has begun a gradual and orderly reversion towards historical norms," Nothaft said. "New construction, home sales and house price appreciation have all been slowing over the past few months."

I have not read the whole article but from the way this sounds, Freddie Mac economist seems to be referring to the speculative buying of real estate by investors hoping to flip the property. More speculators = more likelihood of market crash, so I think it is healthy that RE market is slowing down and digesting gains over last few years.

Fed raised by 0.25% today but said future rise in rates will be dependent on the economy, which most interpreted as saying they will stop for now and raise only if there are signs of inflation in the future. Prior to today's comments, Fed had said inflationary pressures exist and they would continue to raise rates. So, it seems rates will stay at 5.25% for at least few months!

[veronak]

Re: Can Anyone Explain the Feds??

Being that I am a business major ( minor ) I guess I should know somthing..lol
However the Feds as we call them consists of a board of goveners the big man is Bernake all appointed by the Pres. It is the central bank ( the main guy), they are responsible for monetary policy with in the US. which also supervises and regulate banks. Keep in mind that inflation is actually an increase in the money supply ( too much money in the economy) countries such has Jamaica, Haiti all have in increase in the money supply which decreases the dollar value. Keep in mind that the Feds has been around since the after the depression, and our economy which is one of the most watched in the world is also one of the best. They have done a great job this is the first time in recent history that the feds with the increase in rate hikes has been unable to control the housing market, which is the reason for all the hikes started by Greenspan. Yes I am poor...lol but I do believe in our Federal Reserve. Hope I was some help