Fed Lowers Rates, But Misses Expectations

The Fed lowered rates as we expected.

The markets went into a tizzy anyway, saying the quarter point reduction was not enough, and the expectation was a 50 basis point cut.

What will this mean for interest rates?  It's hard to tell, as interest rates have been all over the board lately.  Will stock market swoons push investors into bonds and drive up the costs of those bonds (remember, the cost of bonds is inversely proportional to the interest rate - when the price goes up, the rate comes down)?  It seems this is so.

Does a threat of recession help the real estate markets in just that same way, by depressing stock prices and putting pressure on the Fed for lower short term interest rates?  If the past is an indicator of the future (it usually is), then the answer is "Yes".

Don't root for a deep and severe recession, though.  A moderate or shallow one will do just fine.