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Interest Rate after Fed Rate "Hike" last Thursday
February 22nd, 2010 9:52 AM

One propects emailed me this weekend about the rates.
According to her, her agents said that the rate will
go up fater April since Fed started increased the rates.

1)Fed increased the Discount rates, not Fund Rates.
So the discount rates are for the banks. The bank's cost
higher now. We can only care about the Fed Fund Rate.

2)after March 31st, Fed will stop buying MBS. Either GSEs(
Freedie Mac or Fannie Mae) will step in or private investor
will step in. If the rates goes higher, the Fed will step in
again.

So please don't worry. The rate will not go much higher,
strategy is more important than timing the market.


Posted in:General
Posted by Eric Fang on February 22nd, 2010 9:52 AMPost a Comment

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