Daily Market Update 10/29/08

Mortgage rates were little changed Wednesday ahead of today’s Federal Open Market Committee decision regarding short term interest rates. The Fed is widely expected to cut the Fed Funds rate from 1.50% to 1.00%. Their announcement will be made at 2:15 PM et. Mortgage rates have risen in the past week as many investment funds have been forced to sell mortgage-backed securities to reduce their leverage and raise capital. Under normal market conditions, the vast majority of significant rate movements are the result of economic news. The fundamental economic data clearly supports lower rates, but until the market stabilizes, unusual volatility and upward pressure on mortgage rates will continue.

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