patrick.net

And stocks went *up*!

That's kinda weird. I guess the market was worried it could be half a point and is now relieved.

tvgnus says

putting the new rate at 1.0 percent.

Not really 1%. The new policy is to set the FF rate target to be between [0.75,1.00]%, not 1%. Ever since ZIRP, the FF rate has been very close to the lower number in the interval. So expect just a tad over 0.75% for starters.

rando says

That's kinda weird. I guess the market was worried it could be half a point and is now relieved.

I'm thinking that a quarter point increase is rather weak, and will have no effect on anything.

In absolute terms, a quarter point is not much, true, but it's big relative to current rates.

A 3.75% 15-year mortgage is 7% higher interest payments than a 3.5% 15-year mortgage.

This puts downward pressure on house prices.

rando says

A 3.75% 15-year mortgage is 7% higher interest payments than a 3.5% 15-year mortgage.

True, but has this actually affected mortgage rates yet?

Ironman says

Caption that picture

Janet never swallows.

rando says

In absolute terms, a quarter point is not much, true, but it's big relative to current rates.

A 3.75% 15-year mortgage is 7% higher interest payments than a 3.5% 15-year mortgage.

This puts downward pressure on house prices.

Quicken sending out spam saying "fed rates just got up but our rates just went down".

I'm wondering what this will do for housing prices. In the last 6 months, I've seen my house value jump roughly 15%

Higher rates must put downward pressure on housing prices. It's just math. Loans are more expensive.

That said, rate increases usually lag price increases, so you can see prices and rates follow each other upward.

That is, rates go up because prices went up. The Fed is trying to contain inflation.

rando says

And stocks went *up*!

That's kinda weird. I guess the market was worried it could be half a point and is now relieved.

Patrick. the market was not expecting 50 basis points. It was worried about the balance sheet being unwound sooner than later. This was a dovish meeting in regards to balance sheet so bond prices rallied with 10 year dropping to 2.51 meaning mortgages rates dropped from yesterday.

Thanks! That's a convincing explanation.

rando says

And stocks went *up*!

Everything is GO! Trump is unleashing the Animal Spirits.

They are being very cautious.

Was he or wasn't he?