Finally!!! The Fed Pauses on the Rate Hikes...

Ok, Ok. I did it again. But this time it was on purpose. Today was the big day to see if the Fed would raise the interest rate again. Read on to see what happened...

Here is the Reader's Digest version of what happened today.

Bernanke decided to hold off on another .25% rate hike because he feels confident that inflation is contained for the time being. The markets took a big sigh of relief and help propel the bond market in a favorable direction, which could mean better long-term interest rates in the coming months.

The writing is on the wall that the Fed will actually start to decrease rates at the beginning of 2007 which is good for those who have Home Equity Lines of Credit and Adjustable Rate Mortgages. I am predicting that we will see a refinance opportunity late 2007 or the beginning of 2008.

Why do I think this will happen? Well, there are already signs that the economy is slowing down and companies are trying to squeeze as much productivity out of its workforce as possible to avoid having to add additional employee expense. If business slows, investors tend to get a tad bit jumpy and pull their money out of the stock market and invest in the safe-haven of bonds. This is a double edge sword. It is good for those of us who will be able to take advantage of the rate decreases and save money on our monthly budgets, but bad for our investments and 401k. We will have to wait and see.

As always, you don't have to worry about staying on top of this. If there is a chance to refinance you will be hearing from me. Until next week...