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Fed just lowered interest rates another quarter point...

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Old 06-25-2003, 04:57 PM
  #11
TulsaLarry
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I'll tell you where the money markets will cut first. I make a 10 basis point trail on my money markets, some money markets pay their brokers as much as 25 basis points, and this will be the first expense cut. This is not a major deal, but I have been in the business long enough to know that once it is taken away it will never come back (kind of like a temporary tax, yeah right). Most of the funds do carry around a 1/2% expense (some higher) so expect the funds to get pretty lean.

The Fed does not meet again until August so I guess we better learn to deal with it.
 
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Old 06-25-2003, 05:00 PM
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Low rates... Time to go get more toys...
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Old 06-25-2003, 05:25 PM
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Shane,

Thanks for the kind words. Though I'm not in the market for a home or refinance at the moment, I've been watching the rates go down (and home prices continue to skyrocket), and wishing I had kept the modest townhome I sold over the winter when I moved into the wife's similar home. I must have been lowering the value of the neighborhood because comparable values have risen 15% in the past 5 months. Unreal.
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Old 06-25-2003, 05:34 PM
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Quote:
Originally posted by TulsaLarry
I'll tell you where the money markets will cut first. I make a 10 basis point trail on my money markets, some money markets pay their brokers as much as 25 basis points, and this will be the first expense cut. This is not a major deal, but I have been in the business long enough to know that once it is taken away it will never come back (kind of like a temporary tax, yeah right). Most of the funds do carry around a 1/2% expense (some higher) so expect the funds to get pretty lean.

The Fed does not meet again until August so I guess we better learn to deal with it.
Larry,

That is surely one thing I DO NOT MISS about the retail side of the business. They can really put the screws to you and they only ones they are hurting are their revenue streams. Best wishes.

Shane
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Old 06-25-2003, 08:31 PM
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All of my investors had a rate increase by the end of the day. My advice to those doing a refi, close with the rates you have as they will be going up soon!
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Old 06-25-2003, 09:27 PM
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The market already had the rate cut built in. It would not surprise me to see long term rates increase, see the question was will the cut be 1/4 or 1/2? SO I believe that it overcorrected a bit to hedge the difference, now that it is 1/4 I believe they will increase slightly for a time.

Also anyone look at the yield curve? Flat... that means something has to give and i think it will give at both ends, short term rates down (thanks to the Fed) and an increase in the long term rates.

Anyone catch the sell off of treasuries the other day as people sucked up some bonds by GM I believe?
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Old 06-25-2003, 10:16 PM
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I'm closeing on a 30 year jumbo refi at 6 1/8% on friday, today I found a bank that will do it at 5.88%. Wardey
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Old 06-25-2003, 10:25 PM
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I am a real estate closing attorney and I have NEVER seen ANYTHING like this...this is INSANE!
 
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Old 06-25-2003, 11:12 PM
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Rates are either at or close to the bottom. The bond market sold off immediately when the Fed announced the rate cut as many traders were figuring 1/2% and had to adjust their postions accordingly. As long as the economy shows addtional signs of weakness or deflation, traders will continue to think that rates may fall again and we may see a slight decrease. But, and a big but, if we see some continued signs of improvement or any inflation.......look out. Mortgage rates always move up faster than they come down. As long as the job market remains weak, the economy can only do so well but when it starts to improve the rest of the economy will improve and rates will increase.
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Old 06-25-2003, 11:56 PM
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Quote:
Originally posted by Reindl Powerboats
Low rates... Time to go get more toys...
The interest rates are down......Now if they would just lower the ''principal'' rate, I could get that new ''Cig''.
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