What does the Federal Reserve cutting its target interest rate to near zero percent mean for mortgages?
This is the second emergency rate cut in two weeks, and brings the federal funds rate to between 0% and 0.25%. It's designed to stimulate the economy by making it cheaper for people to borrow money for a mortgage, among other things.Together with the Fed's move to buy at least $500 billion in US Treasuries and at least $200 billion in mortgage-backed securities, the actions signal that the Fed puts the economic effect of the coronavirus outbreak on a similar level as the global financial crisis in 2008.
