FED Cut no help to jumbo fixed rates.

The Federal Reserve key interest rates another half-percentage point. The move was expected after last week’s surprise cut in an emergency session failed to rally markets and quiet recession chatter.

The central bank has lowered rates five times for a total of 1.75 percentage points since September, including the aggressive 0.75 percentage cut last week - the first time the Fed lowered rates in between meetings since the 2001 terrorist attacks..

The Fed’s decision to cut rates further Wednesday afternoon comes on the heels of disturbing economic reports published hours earlier. The reports indicate a sharp slowing of the economy.
U.S. economic growth slowed to a rate of 0.6 percent in the last quarter of 2007. The increase in the gross domestic product (GDP) fell short of economists’ expectations by half and many believe the GDP will be in the negative this quarter. Two straight quarters of negative GDP equals a recession.

Fixed Jumbo Mortgage rates have been rising steadily this week in anticipation of the Fed cuts. We have seen a slight improvement in the 5Y and 7Y jumbo loan arm rates for highly qualified clients with equity or large downpayments.