Oh boy is Wall St. giddy over a possible rate cut in September.  Personally, I do not see it happening.  This is a new regime and the Fed doesn’t seem phased by market jitters.  They have been inflation focused for some time and have not eased their language on this point enough to signal a cut.  My guess is old Ben is happy with his peripheral actions toward the market and the market response.  You have to love how he spanked market put buyers almost two weeks ago.

The problem is, however, that it is just too speculative.  Mortgage seekers are in a difficult conundrum if they sit down and sign today.  The Fed’s action will have a material corrleation on the mortgage rates for the rest of 2007 — do not let historical graphs about the corrlelation between the Fed rate and mortgage rates fool you.