I would predict that the Federal Reserve will lower interest rates as a way of lessening the effects of the current recession.
Please see the following release from the Federal Reserve website http://(www.federalreserve.gov):
Release Date: October 29, 2008
For immediate release
The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 1 percent.
The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.
In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate in coming quarters to levels consistent with price stability.
Recent policy actions, including todayâ€™s rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside risks to growth remain. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Cleveland, and San Francisco."
I wouldn't say that that is directly going to happen but what is happening is that the government is investing 600 Billion into mortgage backed securities which is drastically reducing Treasury Yields. Most experts predict that rates could go as low as 4.5% but it will be more of a market driven phenomenom when it happens.
Currently rates are anywhere between 4.875 and 5.5% depending on your credit score and Loan-To-Value so I would suggest that you register your loan now and then float it over the next couple of weeks so you can see how rates move.
Also, Rate/Term rates are pretty much identical to purchase rates right now.
If you have any questions, please let me know
I hope this helps, Dunes