Most 30-year fixed loans are tied to 10-year treasury. Today 10-year treasuries profoundly ignored the rate cut and closed 0.01% higher than yesterday. If 50 point cut triggers a run on the dollar, 10-year treasuries will go through the roof.
Most ARMs are tied to LIBOR. LIBOR is generally correlated with Federal funds rate, but it does not have to be. We’ll see soon if it drops anywhere near 50 bps.
Many adjustable-rate credit cards and HELOCs are tied to “prime” rate, which is typically Federal funds rate + 3%.
