We have an update on interest rates!

Basically, the FED increased rates to the appetite of the market, and rates look like there will be a drop. YAY!!!

But wait, this is a temporary knee-jerk reaction as the market digests this information. More than likely, we will not have a reprice on mortgages until today when the dust settles and we see what it all means. Right now, the immediate reaction based on the Q and A was that the FED wants to kill demand by increasing short-term rates—think credit cards). The hope is this will cause people to stop spending, which will lead to the cost of goods getting lowered. Thus, attacking inflation on two fronts!

But, they acknowledged that they see a recession on the horizon. By definition, this means 2 quarters of negative GDP—we already had the first phase in the 2nd quarter GDP, so if we get this in the 3rd quarter GDP we are officially in a recession.

Wondering what this might mean for you? Talk to us! Give us a call at 703-342-6995 one of our friendly advisors will assist you!

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