Well, now, and there's - for every dollar the federal government spends, there's real people on the other side, and so when we talk about reductions that are going to affect providers, that's going to affect hospitals and doctors and others.
More Quotes from Franklin Raines:
Well, we're just now seeing the reductions in mortgage rates. The mortgage rates are based on the ten-year rate and the Fed controls the overnight or the shorter rates.Franklin Raines
It creates a contrast between their ideas and ours. We are perfectly happy to be judged by that contrast.
Franklin Raines
The mortgage is the largest obligation that people take on and it's very expensive to get a mortgage and very painful. It's not a fun process. So we've invested quite a bit of money in using the Internet and e-commerce to make it easier. Fannie Mae has become one of the largest e-commerce companies in the world. Last year, we underwrote through automated underwriting and electronically, two and a half million loans, 300 billion of transactions. This year will be over 400 billion. So e-commerce is moving into the mortgage sector and it's going to affect everybody.
Franklin Raines
We think if the economy remains weak that we could see mortgage rates trail down and we think that we could see rates below seven percent into early next year.
Franklin Raines
Well, it's been great for new home purchasers, particularly first-time purchasers. I think this is a good time to be thinking about buying a home.
Franklin Raines
I think the Fed is going to raise interest rates over the rest of this year. I think it will go up at least 100 basis points before the year is out. So the Fed funds rate will rise from about 6 percent to at least 7 percent. The big question is going to be, 'Will the market believe the Fed will beat inflation' If it believes that, then the long-term rates will probably come down and that will be good for housing for the long-term rates to come down. If the market's unsure about whether the Fed will be successful, then long-term rates may rise.
Franklin Raines
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