That question from Alicia Keys' song was one many traders were probably asking, after a week where we saw a massive and historic selloff in Stocks and rallies in safe-haven instruments like Treasuries and Gold. What happened and what does all of this mean for Bonds and home loan rates? Read on for details.

Standard and Poor's downgrade of the United States' credit rating from AAA to AA+ late Friday, August 5th led to an especially volatile week, with the Dow Jones Industrial Average falling over 600 points and the S&P 500 Index experiencing its worst day since December 1, 2008-and that was just on Monday! The extreme volatility continued through the week, including Tuesday after the Fed released their Policy Statement, which was rather downbeat on the economy. In fact, Fed Chairman Ben Bernanke said, "Economic growth so far this year has been considerably slower than the Committee had expected."

So where does our economy go from here?

The incoming economic data will be under a microscope, as global markets try to decipher if the US (and the world) is slipping back into a recession, or just experiencing a slow patch. If economic reports here in the US show even modest strength and an improvement from the recent weak news, Stocks could retrace some lost ground, which would come at the expense of Bonds and home loan rates. We saw some of this happen late last week, after Initial Jobless Claims fell below 400,000 for the first time in weeks and Retail Sales for July had their biggest increase in four months.

That being said, the current and ongoing concerns out of Europe should continue to provide a safe haven bid into the US Bond market... and this will help Bonds and home loan rates. But as you can see, with so many if's, about the only thing we can be sure of is more volatility.

Wherever we go from here, the key takeaway is that RIGHT NOW, home loan rates remain near some of the best levels we've ever seen. If you've been thinking about buying or refinancing a home, give me a call or send me an email to learn how you can take advantage of this situation. Or forward this newsletter on to someone you know who may benefit.