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The Fed's September meeting minutes were released yesterday and revealed a few interesting points:
The Fed minutes show that the Federal Reserve lowered the Fed Funds Rate to 4.750% because there was an inordinate amount of uncertainty in credit markets.
Voting members were concerned that if they did nothing, the problems would only get much worse.
How much worse? Well, when access to credit goes hasta la vista, the entire world economy can freeze.
Imagine if all of your credit cards and credit applications were effectively shut off, limited, or outright refused. The Fed was trying to be prudent, it appears. Better to do too much than too little, it reasoned.
Mortgage rates were flat after yesterday's release of September's notes because there's no clear direction as to what the Fed will do at its next meeting, October 30-31.
For those that like to speculate, though: If the Fed lowers the FFR again later this month, expect mortgage rates to increase. If the Fed holds steady or increases FFR, expect rates to fall.
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator call 513-443-2020.
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