Fed drops rates to 0%?

At some point my posts will not be related to history-making benchmark days that seem to be taking place on a weekly basis.  But today's post is a day late and specifically related to the Fed dropping the Fed funds rate to a range of 0-.25%, and the fury that ensued in the mortgage market after their meeting.  Along with the dropping of short-term rates, there were promises to stay vigilant in turning the economy around and buying up mortgage-backed securities to keep rates low.  

Just a quick lesson on when you hear the Fed cut or raised rates:

First of all, if the Fed cuts rates, that does does not mean mortgage rates are dropping.  This was a rare situation where a short-term rate cut correlated with a drop in mortgage rates.  Again, this had to do with the Fed's language toward our current economic situation, not the rate cut itself.  

What's next?

That is what is so tough about our market.  Day-to-day, many times throughout the day we have huge swings in mortgage rates.  I don't know what tomorrow will bring, but I do know if rates stay around 5% or below for any period of time...housing is going to take off!