It’s a bird! It’s a plane! It’s the Fed to the rescue!
Posted by admin under: Main Jan 24Unless you’ve been hiding underneath a rock, you’re probably well aware of the global market meltdown that began on Monday. You’re probably also aware that it unnerved the Fed enough to have them slash the federal funds rate by three-fourths of a percentage point to 3.5%.
What’s interesting about this move is that the mission of the nation’s central bank is to boost the economy and check inflation and not to bail out Wall Street. But according to Yahoo Finance: the Fed approved the rate cut “after an emergency video conference on Monday night, a day when global markets had been pounded by rising concerns that weakness in the world’s largest economy was spreading worldwide.” This definitely underscored the seriousness of the situation.
Watch for yet another rate cut next week when the Fed meets again. As of today, Wednesday, January 23rd, the financial markets have recovered slightly, but still show signs of weakness and volatility.
How does this affect the real estate market? I think it will be awhile until consumer confidence and spending is restored. The media has a way of making everything seem doomsday. The market around here will still see price appreciation, but sales should continue to decline — especially in weaker markets like Gilroy, South & East San Jose. But things will get better. We must always remember that real estate is a long term investment. There’s always going to be bumps in the road!
Read “How the Fed’s rate cut will affect consumers“.
Source: It’s a bird! It’s a plane! It’s the Fed to the rescue!
Thursday, January 24th, 2008 at 11:45 am and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.