Fed Drops Rates, Now What?

Dated: July 31 2019

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Today we got the word that Fed Chair Powell has dropped the interest rate .25%.  This is the first cut since 2008. As I scour the many news sources reporting on this cut and then watch the DOW drop over 300 points I realize we may have a problem. 

The DOW started to lose ground as soon as Powell stated the FED would not promise future cuts. The entire DOW is based on free money and anytime the FED claims they may not drop the rates again the DOW loses ground. Free money does not build a serious economy. It has built a serious debt problem. And if the DOW acts like it does build an economy then we need to begin to look at the fact that the economy is not what we think it is.

Although I am no expert in economics I can give an opinion.  The economy is shaky. GDP dropped and the World economy is on unstable economic ground. Duetsche Bank has really had some problems and it falls under the "TOO BIG TO FAIL" label. No one even knows what to do if Duetsche gets into further trouble.

I suspect that the FED will have to drop another .25% in the near future. But they are backing themselves into a proverbial corner if inflation takes off. And even that number is starting to show signs of becoming an issue. 

On a local market sales update, if you want to buy a home then your rate is likely going to be good(pending credit, income and etc) and in Colorado Springs and Pueblo selling a home remains great. What the near future holds we will just watch together. Until next time, friends!

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Patrick Muldoon

I have many interests and hobbies to supplement my busy career in real estate. Although I enjoy my work I also enjoy finding free time to enjoy the most important things in life. This includes being w....

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