Fed Lowers Fed Fund Rate

Sept. 18 (Bloomberg) -- The following is the full text of the statement released today by the FederalReserve:The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 4 3/4 percent.Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.Voting for the FOMC monetary policy action were: Ben S. Bemanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kobn; Randall S. Kroszner; Frederic S. Mishkin; Charles L. Evans; William Poole; Eric S. Rosengren; and Kevin M. Warsh.In a related action, the Board of Governors unanimously approved a 50 basis point decrease in the discount rate to 5 1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve banks of Boston, New York, Cleveland, St. Louis, Minneapolis, Kansas City and San Francisco.Last UpdatecJ’ September 18, 2007 14:15 EDT
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What will happen to mortgage interest rates? I do not believe rates will change immediately. However, I do believe the stock market will see an increase based on the news from the Fed. A long-term stock market gain could mean lower bond prices.

Regardless of interest rates, Myrtle Beach is in a full-fledged Buyer's market. If you have been thinking of purchasing a home or investment property, now is a great time. Many sellers are offering great incentives, and many are willing to negotiate their prices. Call or email me if you have any questions.