Fed lowers rates

[lendingmaestro_IHB]

Well, if more of your after tax income is being spent on durable goods and services than your buying power would decrease

 

[optimusprime_IHB]

Reason...lets reason then...





So if you are using more of your dollars to purchase more expensive goods due to higher commodity prices etc.





You will have less saved up ...so less for that downpayment on a home.

 

[irvine123_IHB]

<p>optimusprime, you beat me to it...I was wondering about the same thing...</p>

 

[IrvineCommuter_IHB]

Following up on LM's points, less buying power means less expansion in the economy, flat wages, and more fear by the average American. More people will be struggling with getting by and will not be able to think about buying their next home. Less demand equals lower house prices.

 

[reason_IHB]

<p>That's true. Your buying power would decrease. That would mean it will take more to buy a home. If a dollar today is not worth the same tomorrow. Then 500k today is not worth 500k tomorrow. Hence, it will cost more to buy a home. Granted there's a correction presently with home prices.</p>

 

[optimusprime_IHB]

HAHAHA....yeah...a $500k home today will be lower over the next few years

 

[irvine123_IHB]

<p>by following the logic outlined above, so lowering rates actually lowers the house price...so let's dont' be angry at the feds then...</p>

 

[lendingmaestro_IHB]

Will this affect the prices for tacos @ taco tuesday nights??

 

[kcmkane_IHB]

LM -- LOL. I could give a damn about the taco prices, it the price of tequila I am worried about.

 

[IrvineCommuter_IHB]

I am most disturbed by the fact that I cannot get a Jumbo Jack for $1 anymore. Dang you Bernake!!!

 

[irvine123_IHB]

<p>LM, won't affect the price of TAco..but you might get better service since the waiter can now afford a house here! </p>

 

[mino2126_IHB]

Hey shouldn't T-Notes be rising now?

 

[lendingmaestro_IHB]

Fixed income rates are on the rise, yes

 

[graphrix_IHB]

<p>Short term yields are down but long term yields are flat. <a href="http://tinyurl.com/3bardu">Looking at the long term yields it says INFLATION!</a></p>

 

[optimusprime_IHB]

Steepening of the yield curve.....like it matters !

 

[graphrix_IHB]

Oh and mortgage bonds did not improve today and actually got worse. So anyone hoping that the Fed cut will lower interest rates on mortgages is mistaken judging by the traders. Add the need for higher profit margins al you get is ouch!

 

[IrvineCommuter_IHB]

Analysis by people more knowledgeable than me.





<a href="http://www.cnbc.com/id/20839663">www.cnbc.com/id/20839663</a>

 

[optimusprime_IHB]

Good post IC...I did see that Bies interview...





It's interesting the Fed is trying to be pro-active.....they know the trillion dollar reset is coming up in 2008 and 2009.

 

[marty mcfly_IHB]

I don't think anyone thought the rate cut would have an immediate impact on mortgage rates. Wait a few months.

 

[awgee_IHB]

<p><em>"So ... can you explain to someone who only treats teeth what this'll mean for jumbo loans? Thanks."</em></p>

<p>Next to nothing. I have to do some work, , but later tonight, after I put my daughters to bed, I will explain why.</p>