Will the Fed Cuts Help Home Mortgage Interest Rates?

The Federal Reserve will remain on course toward implementing additional interest-rate cuts, at least in the near term, although the journey has become more treacherous as prices are rising, the U.S. central bank's chairman said Wednesday. 

Downside risks to economic growth remain the key focus of monetary policymakers, Federal Reserve chief Ban Bernanke told Congress.  Inflation remains a secondary concern. If the markets agree, this is good news for home loan rates since inflation concerns have a negative impact on mortgage rates.

Essentially, the FOMC's strategy is to "cut and hope," trusting that lower short-term interest rates will help the economy regain its footing, and that incipient inflation pressure will prove to be short-lived.

Remember that it often takes 6-9 months for a Fed action to filter its way through the markets and have an effect on economic conditions. 

Currently home loan rates have improved every day this week.  If you need to lock in the next month stay in close contact with your Mortgage Broker.  The market is highly volitile so good advice is needed.