Today is Mr. Greenspans turn to show the world who the REAL boss of the American economy is! It is expected that the Fed Funds Rate will rise by 0.25%. This is the interest that banks charge each other on overnight loans so this rate will go from the current 2.75 percent to 3.0 percent.
A number of things have come to light since my last posting – which by the way as almost ten days ago – wow – how time flies. The commerce department has reported that personal income rose by 0.5% – while personal spending rose by 0.6% – and an average family saved only 0.4% in the month of march! So, apparently, the idea is spend spend spend – someone one else will pay the bill later. No wonder Americans have a federal government that does the same. You would think this way of doing things would catch up with us sometime. I guess onces the Chinese worker makes more than $10/week – we’ll see something.
Other than that, the economy didn’t grow as fas as expected in the first quater of 2005 – which means inflation is not as much of a concern as they have been saying. Mortgage rates should stay relatively stable with minor fluctuations here and there. However, don’t be taken aback when rates rise today – I told you so.
As always, feel free to write to me, and remember to visit www.aimeeloans.com for all your home financing needs!