Government Support for Homes Pending Foreclosure
Bush recently passed a housing law to try and “help” homes that are pending foreclosure. $300 billion is being given to the FHA to help refinance homes at a more affordable rate. This is expected to be dispersed to over 400,000 households. There are many other perks to this housing bill such as grants to fix up foreclosed homes and tax credits for first time home buyers. Read the full article from the News & Observer.
Emergency Meeting Called by the Fed: Interest Rate Cut
On January 22, the Fed cut the benchmark interest rate by 3/4 of a point (now at 3.5%). This meeting came a week or so early from the next board meeting on January 29th. This was partially due to the panic that swept the globe on Monday when all foreign stock markets took a plunge.
What is most concerning is that this is the largest cut ever. Typically we have not seen cuts more than .5% (especially in a spontaneous meeting like this one). I guess desparate times calls for desparate measures.