“Over in Europe and Japan they have NEGATIVE RATES. They get paid to borrow money. Don’t we have to follow our competitors?” @Varneyco Yes we do. The Fed doesn’t have a clue! We have unlimited potential, only held back by the Federal Reserve. But we are winning anyway!
Donald J. Trump (@realDonaldTrump) October 29, 2019
Economic Turmoil
While the drop in interest rates has helped homebuyers in the short term, there’s an argument that those benefits are secondary to the larger economic turmoil bubbling up around the globe. Gross domestic product in the third quarter grew at a 1.9% annual rate, the lowest since the end of 2018, Commerce Department data showed Wednesday.
“I don’t look at this is as being great for the customer,” said Eric DeBello, owner of CHM Mortgage Group in Marshfield, Massachusetts. “From a macro standpoint, this stuff isn’t good.”
It’s also tricky for investors who are deciding how much to allocate to mortgage bonds. Uncertainty can’t be easily measured in financial models and algorithms, said Scott Buchta, head of fixed income strategy at Brean Capital.
“Before, unpredictability used to be whether unemployment was going to be bad or good -- now it’s a tweet,” Buchta said. “For investors, that’s dangerous because they get whipsawed by things.”
This article provided by Bloomberg News.