Economic news reveals Fed hikes
may be working -- so lock in now!
By Michael D. Larson • Bankrate.com

Attention, interest rate shoppers: There's a fire sale in aisle six!

After several weeks of steadily increasing mortgage rates, borrowers have caught a big break. Reports on home sales, construction spending, manufacturing and employment released this week all showed that the Federal Reserve Board's rate hikes may be succeeding in slowing the economy. That means the Fed's recent rate-raising cycle may soon be over.

Reaction swift and sweet
Because market-watchers have been longing for data to confirm their hopes the past several weeks, their reaction has been both swift and sweet. Mortgage hunters, for instance, can grab 30-year fixed rates that are anywhere from a quarter of a percentage point to a half of a percentage point lower today than they were just a few weeks ago.

So what should you do? First, it's important to note that this may not be the real McCoy. Economic growth or inflation may start accelerating again soon and that could drive borrowing costs higher. But considering that this is the first ace-king combo borrowers have been dealt in the grand economic blackjack game for a while, it's time to consider cashing in some winnings.

Now is time to act
Shoppers who have been floating their rates ahead of a mortgage closing or who need a few extra basis points to make that loan happen, for example, should strongly consider locking immediately. Savers who have been sitting on the fence waiting to snag a multiyear certificate of deposit may want to act, too. Annual percentage yields on some 5-year CDs are near 8 percent and if the Fed's done hiking, or close to it, they won't be going much higher.

At the very least, sit down and take another look at the numbers this weekend. After all, who knows when the blue light will be switched off again?