Suprise From the Fed

In a surprise move, the Fed reduced the Discount Rate by a half percent this morning. The Discount Rate is the rate the Fed lends money to commercial banks, credit unions and other large lenders. It is different then the Fed Funds Rate, which is the rate that banks lend funds to other banks. The cut did provide some liquidity relief to the market but did not directly affect mortgage rates. This may help the financial markets a bit but the long term effects are uncertain