Yardbird
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Yes, housing is in recession and the feds are lowering interest rates to stimulate the economy. What makes the situation problematic is that inflation is still high. the feds cannot lower interest rates too much when inflation is high, or inflation will simply go higher. Eventually the recession will cause inflation to stop, the feds will lower interest rates to very low, start another inflationary bubble, and the cycle will start all over again. |
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asafegous
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up because the physical dollar is valued at a higher rate |
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sallas
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In Australia, at this time, interest rates will probably go up and they are already starting to do so without guidance from the Reserve Bank. The problem is not so much the Australian economy, but our exposure to the US sub prime mortgage market. We don't know what the Australian savings' banks exposure is to the sub prime market, but I suspect it is greater than they are letting on.
While ever the likes of RAMs and Centro can't get funding to stave off liquidation, the domestic interest rates will rise. |
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gleelogan
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the interest rates for a fixed 30 year mortgage is now at 5.57..but today there are talks for it to go lower..maybe a point or point and half..so wait for it... |
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Mark C
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Recession means that the economy is actually going backwards, meaning you can't afford what you used to be able to afford.
The Federal Reserve will continue to lower the prime interest rate to assist the banks in lowering lending rates to encourage people to spend money, making homes more affordable. |
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elementoflife
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Normally they will reduce interest rates to encourage people to start buying again. When people start to feel more confident about being able to buy things, due to low interest loans (and mortgages), people start buying, which often has a ripple effect in other areas of life (they can start spending on more 'fun' stuff which starts to bolster the economy again). I think however, the American government has decreased interest rates significantly over the last while and it hasn't done much to bolster the economy as of yet.... |
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Jason K
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Treasury will try to reduce the interest rate but... they've already done it twice and havent slowed down the recession |
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src50
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It doesn't work like that... |
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mattylakeydog
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interest rates on home loans increase durning a recession to curb peoples spending and slow down inflation. |
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