Today the Fed cut the Fed Funds Rate by 1/2%.  This is significant in monetary policy because this is the first rate cut since June of 2003.  It's important to remember what the Fed Funds rate is because it doesn't really directly impact all loan rates. 

 "The federal funds rate, an overnight lending rate that banks charge each other, is important since it influences the amount of interest consumers must pay for various types of debt, such as credit cards, home equity lines of credit and auto loans." - CNN money.com

So the rate cut will provide relief to home owners with equity lines and auto loans will directly benefit, but that doesn't necessarily mean that tomorrow morning mortgage rates will drop too.  For that we'll have to wait and see.  Either way the fact that the fed funds rate has been cut means that what's going on in the credit markets and in banking is substantial enough for the fed to step in and do something. 

What we really need to be looking out for is FHA loan limits, and conforming loan limits to see if they will be raised or not.  That's what's really going to have an impact. 

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