Easing the discount rate

The move only allows member banks to borrow from the Fed at a lower rate. This tool is really symbolic as it is considered a stigma if a bank is seen having to borrow from the Fed. The Fed funds rate remains the same as of now. Lowering this rate target would lower ARM's, but that has not happened. The situation will improve because non agency paper is being to trade again. However, the market now prices that debt with greater risk spreads versus government/conforming backed loans. The end result is a higher rate for jumbos for all regardless of your credit profile and limited access to jumbo loans for lower credit profiles.