From yesterdays announcement at 215 PM ET.
Recapping the FOMC statement from January 27, 2010 and what it means for mortgage rates.
The FOMC noted that the economy has “continued to strengthen”, the financial markets are growing and the jobs market is getting better. So not much has changed.
The Federal Open Market Committee voted to leave the Fed Rate within its target range of 0 – .25 percent
Mortgage Markets historically are negative to Fed Statements. I would expect Mortgage Interest Rates to rise over the next 30 to 60 Days. I am in a LOCK bias as of right now.
There was absolutely no mention of the current housing market’s strength! The last few Fed statements included specific verbiage. What does this mean?
This is the sixth time in a row that the Fed has spoken about the economy with great optimism. Will this tell the markets that the economy is growing and that the recession is over?
All is not good however, the Fed spoke of and identified a few negatives:
- Consumers credit is very tight and will continue to be for the near future
- Housing values and particularly wealth are down
- Corporate new hiring is stagnant
The tone from yesterdays overall message was very positive.
Also to be noted was the Feds holding the Fed Rate near zero percent for an extended period of time. This program is expected to be finished by the end of March 2010. The original plan and commitment to mortgage and housing market was $1.25 trillion. This is interesting news because the bond-buying program surpassed mortgage rates through 2009
The Fed next meets in March
bc@SmarterBorrowing.com 617.771.5021
bc@smarterborrowing.com
617.771.5021
