The Fed Decides On Interest Rates Today

After the mortgage meltdown, the Department of Labor seeing the first jobs decline since 2003, all eyes are on the Federal Reserve.

Even though the FHA has stepped in to the subprime mortgage market and the job loss was only 4,000 with the unemployment rate being virtually unchanged at 4.6%, recession is the talk. In the days of 24 hour news, blogs and media trying to have the next headline to have people tune in, the Federal Reserve is at the center of it all.

From Bloomberg.com

The Federal Reserve will probably cut its benchmark interest rate today for the first time in four years, seeking insurance against a recession. The main question is how big a policy Chairman Ben S. Bernanke is ready to buy.

While a quarter-point reduction in the federal funds rate may not be enough to bolster growth and investor confidence, a half-point cut might fan inflation and be perceived as giving in to pressure from Wall Street firms that made bad bets, especially in the market for securities backed by subprime mortgages.

I will be back later this afternoon or tonight after the Fed makes their decision to talkabout how their decision plays into home prices and home purchases.

By the way, anyone catch Alan Greenspan on 60 minutes Sunday night?

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