Yesterday, the Fed announced another Fed Funds rate cut, lowering the rate to 1% - A level not seen since June 2003.  Typically Stocks enjoy a rate cut and Mortgage Bonds (interest rates) suffer.  Why is this?  The Fed Fund's rate only effects the rates on credit cards, car loans, student loans, boat loans.....but not home mortgage rates.  When the government lower's the interest rates on these items, it frees up cash for a household and this tends to cause inflation (inflation is when the cost of goods rises).   Mortgage Bonds hate inflation.