So, the Prime and all that jazz went down today!  It was lower by .75%, just a little less than the betters’ game, but enough to make the stock market rally!   What it did not do was lower mortgage rates.  I swear! 

The minute the Fed announced the cut, the lenders sent out their notices on the rate increase.  Not by much, but enough to piss us all off.  So, why, why, why? The mortgage rates are tagged to the 10 year bond yield, not the prime rate.  After the Fed announces the Prime rate reduction, they ruined it by being gloomy about the overall picture of the economy.  ( I thought everything was fine last week!) 

Words like, inflation, slow employment, sluggish housing and pull back on consumer spending were thrown around. So, the bond traders who are all nervous Nelly-wash women to begin with, started going crazy and sell sell sell!.  So, the yield goes up and the mortgage rates go up.  Boo hoo. 

 Do not lock in on panic moves, wait they will go down to where the were.  I can be a better too and tell you they will go way down……maybe soon.

Dale Siegel