It will not equate, however into rate cuts for borrowers, in my opinion.
It will make it easier for investors to borrow more money to lend just as Countrywide sold off shares of stock for a larger equity line of credit. How many people did Countrywide lay off? 8,000?
It's going to take more aggressive measures to drop mortgage interest rates than a measly 1/2 point drop in the "discount rate" before consumers start seeing any benefit. It is all smoke and mirrors on the govt's part. Don't fool yourself.
Dig in for the lo-o-o-o-o-o-o-o-ng run.
I hope it is a half point. The lender in our office was just talking to us about this today, and he said that a quarter point is already basically "built-in" (expected), so that wouldn't have any positive effect on our industry. I don't expect more than a half, though it's fun to speculate!