Fed Reserve and Lower Fixed Rates

There was a massive drop in the 10 year note today, in fact it was one
of the largest one day drops in history!! What this will equate to is
lower rates as much as 1/2 (.50) on most fixed rate product. Below is a
press release from the Federal Open Market Committee (Fed Reserve)
announcing what they did to cause the drop. This is welcomed good new,
and I thought it was good information for everyone have.

Press Release

Release Date: March 18, 2009
For immediate release
Information received since the Federal Open Market Committee met in
January indicates that the economy continues to contract. Job losses,
declining equity and housing wealth, and tight credit conditions have
weighed on consumer sentiment and spending. Weaker sales prospects and
difficulties in obtaining credit have led businesses to cut back on
inventories and fixed investment. U.S. exports have slumped as a number
of major trading partners have also fallen into recession. Although the
near-term economic outlook is weak, the Committee anticipates that
policy actions to stabilize financial markets and institutions, together
with fiscal and monetary stimulus, will contribute to a gradual
resumption of sustainable economic growth.
In light of increasing economic slack here and abroad, the Committee
expects that inflation will remain subdued. Moreover, the Committee sees
some risk that inflation could persist for a time below rates that best
foster economic growth and price stability in the longer term.
In these circumstances, the Federal Reserve will employ all available
tools to promote economic recovery and to preserve price stability. The
Committee will maintain the target range for the federal funds rate at 0
to 1/4 percent and anticipates that economic conditions are likely to
warrant exceptionally low levels of the federal funds rate for an
extended period. To provide greater support to mortgage lending and
housing markets, the Committee decided today to increase the size of the
Federal Reserve's balance sheet further by purchasing up to an
additional $750 billion of agency mortgage-backed securities, bringing
its total purchases of these securities to up to $1.25 trillion this
year, and to increase its purchases of agency debt this year by up to
$100 billion to a total of up to $200 billion. Moreover, to help improve
conditions in private credit markets, the Committee decided to purchase
up to $300 billion of longer-term Treasury securities over the next six
months. The Federal Reserve has launched the Term Asset-Backed
Securities Loan Facility to facilitate the extension of credit to
households and small businesses and anticipates that the range of
eligible collateral for this facility is likely to be expanded to
include other financial assets. The Committee will continue to carefully
monitor the size and composition of the Federal Reserve's balance sheet
in light of evolving financial and economic developments
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles
L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel
K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.