Palm Beach Real Estate and Loans

Mortgage Rates Report:  Nationally syndicated from Long Beach to Palm Beach

Fed Chairman Bernanke testified before Congress today noting his "increased concerns for slow economic growth".   While he was careful to say that The Fed doesn't forecast negative growth (READ: recession), he did believe that the risks of a recession have increased.

I think the Fed Chairman is either (a) clueless or (b) practicing the art of circumspect rhetoric.  I'm inclined to believe the latter.  I think Bernanke is delivering bad news.  He offered support for radical fiscal policy (permanent tax cuts) to Congress.  When a Fed Chairman signals to Congress that the ball is in their court, to stave off a recession, he believes that monetary policy (rate cuts) have become useless.

Bernanke is saying that he has done all that he can do to stop a recession.I think a 1/2 of 1% rate cut is built into the pricing; now the Wall Street traders believe that more cuts are on their way (after January 30).  I'm splitting my recommendation to the following:

1- Purchases closing in less than 15 days:  Lock the mortgage rate immediately

2- Purchases closing in 15-45 days:  Cautiously float the mortgage rate

3- Refinance applications- lock at application

Current 30 Year fixed rate mortgage: 5.5% rate, 5.79% apr

Follow Mortgage Rates Report on Twitter