RATE NEWS

This just in from my friend, Jason Pike, at Countrywide:

Good morning: Global banks, in an unprecedented move, cut short-term interest rates in order to ease the current credit crisis. The Fed reduced its benchmark rate to 1.5 percent. The ECB's main rate is now 3.75 percent; Canada's fell to 2.5 percent; the U.K.'s rate dropped to 4.5 percent; and Sweden's rate declined to 4.25 percent. China cut interest rates for the second time in three weeks, reducing the main rate to 6.93 percent. I would expect more rate cuts are in the cards as global banks continue to try and spur lending. The impact of this move on mortgage-backed securities and Treasury obligations is fairly neutral. As many of you know, and as I addressed previously, future traders at the Chicago Board of Trade had already priced in a 100 odds of a 50 basis point cut by the Fed. This move however clearly signals the Fed will go lower for its target fed funds rate. The next FOMC meeting is scheduled for Oct 29th. Question is can we wait????