Stocks ended sharply higher today after the Fed announced it has lowered its Fed Funds Target to a range of 0-0.25% from 1.0% today. Accompanying this announcement was a statement that the fed will be actively providing capital and purchasing mortgages, among other things, to help spur economic growth.
Prior to the announcement, the Dow was up about 100 points, and it closed up nearly 360 points higher. The Dollar fell sharply against the Euro in Forex trading as the spread in U.S. and European interest rates widened. Late in the day, the 10 year Treasury Yield fell to 2.30%. In short order, we should see fixed rate mortgages drop below 5%. This will help spur some new home buying.
Before the markets opened today, new economic data on housing indicated the sharpest decline in new housing starts and building permits in nearly 25 years. The Consumer Price Index also fell by 1.7% in November.
More to come
Scott Cole
www.bestdaytradingstocks.com
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