By Andy Block
Mortgage Advisor and Personal Finance Advisor

The July Fed meeting concluded earlier this week and, as expected, the Federal Reserve cut target range lending rate to 2% - 2.25%.

As a refresher, "the Fed" refers to the Federal Open Market Committee, the monetary policy making body of the Federal Reserve System.
    

Here are five things to know about the Feds:

1.    The Fed does not control mortgage rates.

2.    The Fed sets the Fed Funds and Discount Rates. These are the costs for overnight loans from bank to bank or from the Fed to member banks.

3.    When the Fed cuts their rates, mortgage rates can actually rise. Lower Fed rates can be good for stocks, so investors often sell mortgage bonds to raise cash for stock investments. When bond prices fall, mortgage rates rise.

4.    Rates may already reflect Fed cuts. Investors regularly speculate and place their bets in anticipation of Fed action. This will move markets in advance of the news.

5.    Ready to act? Locking in a rate now may make sense. Depending on the particular scenario, even small rate changes can have a big impact.


Please Contact Andy Block with OPES Advisors For All Your Financial Needs ablock@opesadvisors.com