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With just a few days remaining until the Federal Reserve's next meeting, the guesses about what moves the Fed will make next are becoming more clear.
Two weeks ago, there was a 70% chance that the Fed would stand pat at 4.750%. At that time, I was questioning whether a HELOC or HELOAN was the better option.
Then, a steady stream of less-than-positive news about the economy started, coupled with missed earnings and negative sentiment from Wall Street.
Throw in a few public speeches from Fed memebers and technical trading factors like 200-day moving averages and you start to understand why that 70% confidence level is now just five percent.
Today, markets expect with 95% certainty that the Fed will lower the Fed Funds Rate October 31 after its two-day meeting concludes.
This is good news for holders of Home Equity Lines of Credit, but may be bad news for mortgage rate shoppers; the last time the Fed lowered the Fed Funds Rate, mortgage rates spiked on a weakened dollar and recession fears.
HELOC or HELOAN? Today, I am little more sure. The answer is HELOC.
(Image courtesy: Federal Reserve Bank of Cleveland)
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator call 513-443-2020.
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