A Simple Explanation Of The Federal Reserve Statement (August 9, 2011 Edition)
Tuesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The vote was 7-3 — the first time in 5 meetings that the nation’s Central Bank was non-unanimous and the first time since 1992 that the FOMC adjourned with as many as three dissenters.
In its press release, the FOMC had little good to say about the U.S. economy, noting that since its last meeting in July:
- Growth has been “considerably slower” than expected
- Labor market conditions have deteriorated
- Household spendng has “flattened”
The Fed also noted that the housing sector remains depressed.
On the positive side, the Fed said that business investment in equipment and software continues to expand, and that energy costs have dropped and no longer contribute to inflationary pressures on the economy.
In fact, the Fed worries that inflation may be running too low for the country’s good.
To that end, the Federal Reserve has pledged to keep the Fed Funds Rate in its current range near 0.000 percent “at least until mid-2013″. This is a departure from prior statements in which the Fed gave no such date.
Mortgage market reaction to the FOMC statement has been positive this afternoon. Mortgage rates are improving, but note that sentiment can shift quickly — especially in a market as uncertain as this one.
If today’s mortgage rates look good in your household budget, consider locking in a rate.
The FOMC’s next scheduled meeting is September 20, 2011.
Related posts:
- A Simple Explanation Of The Federal Reserve Statement (April 27, 2011 Edition)
- A Simple Explanation Of The Federal Reserve Statement (December 13, 2011 Edition)
- A Simple Explanation Of The Federal Reserve Statement (June 22, 2011 Edition)
Michael Haigh has 20+ years of professional experience in the banking and mortgage industry. He has the knowledge, education, and dedication to get you the best loan for your situation, answer your questions honestly and completely, and make your mortgaging experience a pleasure. His reputation includes being the number one lender in the country for CitiBank for 9 years, then at Chase for 1 year and now with WJ Bradley since August of 2009. This is because of the quantity of loans, myriad of people he's helped, and his dedication to helping his clients find the perfect loan for them.
