January 28, 2009
January 28, 2009 by admin
The stock market jumped on news following a report that the Fed was poised to begin purchasing toxic debt from leading banks. This move has been long anticipated as an additional necessary step to jump start the economy and provide banks with increased lending potential. The stock market took the news and extended its win streak to four straight days. Financial stocks surged and some of the nations largest companies (Bank of America, Citi, JP Morgan) have jumped over 20% in the last week as they recover from near historic low valuations.
The FOMC today announced there would not be any changes to the Fed Funds rate. Their cuts late in 2008 have left little room for future rate cuts, so they are likely to explore other alternatives to help improve the credit markets.
The yield on the ten year bond rose to 2.66% following the rise in the stock market. This is likely to have a slight impact in pushing mortgage rates higher. Fixed mortgage rates are still in the low five percent range and remain opportunistic for consumers who are looking to refinance or purchase a home in the near future.