Interest rates remain steady for week ending 9/6//19

Mortgage interest rates for buying a home on the Palos Verdes Peninsula remained essentially unchanged this week ending 9/6/19/19. The following are excerpts from the newsletter on interest rates published by HSH Associates :

“There’s a little bit more important data due out before the Fed meets on September 18 and 19. At the moment, odds are spot on that a quarter-percentage point decrease in the federal funds rate will come, and given the global situation that seems likely.

We did wonder a few weeks back if the Fed might start considering trimming in increments of one-eighth of percent rather than a quarter, which would give them a longer series of available moves before a zero bound is hit. On a percentage basis, a move from 2.5% to 2.25% represents a 10% reduction in the cost of money; another quarter percentage point would represent a further 11.1% reduction. A 1/8 percent move would be a 5.4% decline, and would be a cumulative 15% drop in the base cost of money since July. It’s not likely that the Fed would change their familiar cadence without warning, but it is something to consider, especially as the Fed has adopted a the use of a range for the funds rate rather than an absolute value.

Anyway, amidst an improvement in optimism, interest rates firmed up a bit in the mid part of the week, but settled back a bit to close it (probably just some defensive posturing by investors to protect against weekend surprises). Should none come, odds favor a little bit of increase in mortgage rates by the time Freddie Mac reports next week, probably just enough to take back some of this weeks unexpected fall.”

The following are interest rate quotes from John :Alvin of American California Financial Services, Inc. :