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Tuesday, September 18, 2007

Fed cut could buoy housing markets

September 18
The Federal Reserve's aggressive half-point cut Tuesday could provide support for a slumping housing market. A quarter-point drop had already been priced into the market for Treasury bills and other instruments tied to mortgage rates, according to Richard DeKaser, chief economist for National City Corp. The deeper cut means mortgage rates may have a little more room to fall, giving support to prices. The Fed Funds rate affects a range of consumer loans, including home equity and mortgages. lower mortgage rates would add to the number of home buyers able to afford to make purchases, increasing demand for properties and buoying home prices.


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