Bank Rates Likely to Get Better

Rates on bank deposits are set to go higher if the recent statements of leading economists and the Federal Reserve Chairman are to be believed. The economy is still mired in recession, but the pace of contraction has decreased. Any hints of economic growth, when combined with the enormous amount of money flooded into the [...]

Obama and Interest Rates

President Obama reached his 100th day in office this week with huge questions lingering regarding the effectiveness of his policies and strategies. While it may take years or decades to objectively evaluate the Obama Administration’s response to the financial Pearl Harbor he has faced, at least for this milestone week Obama enthusiasts point to the positive. [...]

Short-Term Adjustable Mortgage Rates Now Higher Than 30-Year Fixed Rates

The weekly survey of mortgage lenders conducted by Freddie Mac is reporting that the average rate on a shorter-term adjustable-rate mortgage is now higher than fixed mortgages of 15 or 30 years. This is the first time since Freddie Mac started the survey over 20 years ago that the mortgage rate curve has been inverse.  Adjustable Rate Mortgages (ARM)’s are mortgages [...]

Government Bailouts May Increase Long Term Interest Rates

The price tag for the US taxpayer of the government bailouts is reaching staggering proportions. To date the estimated costs has been reported at:
$29 billion for Bear Stearns
+$100 billion for Freddie Mac and Fannie Mae
$85 billion for AIG
$400 billion for the FDIC failed bank fund
$700 billion for the entity which will buy mortgage securities from [...]

Warren Buffett helps Interest Rates

Bond yields moved sharply higher today after news that Warren Buffett’s firm Berkshire Hathaway has offered to assume liability for the municipal bonds of troubled bond insurers. US Treasuries have been a safe haven for investors since last summer when the credit and mortgage markets began to experience serious setbacks. So any news, like today’s [...]

U.S. Treasury Yield Curve

Investors in United States Treasuries have to extend maturities out at least 5 years to earn a 4.00% yield and are only rewarded with another 50 basis points by extending out 30 years. Analysts believe a steepening of the yield curve is on track for 2008 with inflatin expected to pick up.
Investors may find the [...]

Interest Rates and What to Expect

FEDERAL RESERVE CUTS RATES 50 BASIS POINTS

Today’s cut by the Federal Reserve of the Federal Funds rate and Discount Rate will have a ripple effect on consumer interest rates.

Banks have lowered their prime lending rate to 7.75% from 8.25% which will lower interest costs on a wide variety of variable rates loans, home [...]

Why the LIBOR Rate is Important to the U.S. Economy

LIBOR is the base interest rate paid on deposits between banks in the Eurodollar market. A Eurodollar is a dollar deposited in a bank in a country where the currency is not the dollar. The Eurodollar market has been around for over 40 years and is a major component of the International financial market. London [...]

Global Credit Crisis and Interest Rates

Federal fund future prices are suggesting the Federal Reserve will be forced to do an emergency rate cut within the next week in advance of the September meeting according some market analysts. Fed Funds futures appear to have priced in a substantial likelihood that the Fed may make the move after a series of recent [...]

The 40-year and 50-year Mortgage Ripoff

The increase in mortgage rates over the last couple of years has led to a new level of desperation in mortgage lenders in placing homeowners into mortgages they may or may not be able to afford. One of the hybrid mortgages created in the last couple of years is the advent of the 40-year and [...]

Forecasting the Federal Funds Rate

The Federal Funds rate is the most closely monitored rate set by the Federal Reserve. Economists and Fed watchers will make predictions about the future of the benchmark rate after nearly every economic release. Typically, the language in the statements released by the Fed is not enough to give a clear indication of how the [...]