The Federal Reserve cut interest rates today by 75 basis points. The Fed's latest move brought the federal funds rate down to 2.25 percent, the lowest point since late 2004. It also marked the Fed's second back-to-back cuts of three-fourths of a percentage point. The Fed has also cut the funds rate six times since last September, with the reductions becoming more aggressive since January. Despite this latest cut, market participants who were expecting a 100 basis point cut in rates, said today's move is not sufficient to help out the beleaguered financial markets. However, this puts the Fed in a better position to help out given the recent creation by the Fed of the term securities lending facility, or TSLF, among other things, participants said. "While the Fed was slow to clue in to how quickly things could unravel, recent events show Bernanke & Co. now fully comprehend the risks to the economy and to the financial system," said Max Bublitz, chief strategist at SCM Advisors. He added that today's Fed action has had a greater impact than it otherwise would because the Fed had previously expanded the number of financial institutions that could access cheaper liquidity. "With the TAF, TSLF, and PDCF in place, today's less-than-expected rate cuts will be felt more directly and more fully by those institutions involved in the process of creating credit," Bublitz stated.
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Known for subprime financing, the sponsor has been making inroads lending to near-prime customers in the last couple of years.
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Spreads ranging from 16-18 basis points over the three-month, interpolated yield curve on the P1 (Moody's) and F1+ (Fitch) notes, to 160 to 170 over the benchmark on the class D notes.
April 25 -
Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
April 25 -
Broken down by product type, the agency's NJCLASS Standard Fixed product should account for a large majority of the loans, 75.4%. NJCLASS Consolidation will account for the next-largest group, 14.1%.
April 24 -
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
April 24 -
The notes will price against Treasurys, with spreads expected to fall between 85 and 90 basis points over the benchmark.
April 24