We're In A Buyers Market Lower mortgage rates haven’t caused an uptick in demand just…
Federal Reserve: No increase in rates…this time…
The Federal Reserve Bank’s Open Market Committee (FOMC) finished up its meeting today and, as was expected, didn’t increase interest rates.
What The Fed Said
Last month’s decision to bump rates higher at least four times in 2018 has not changed. We should all probably expect more increases in the last quarter of 2018.
The Fed’s short-term rate remains at 1.75% to 2% — where rates ended up after June’s meeting and the decision to increase the target rate by .25%.
The Fed said then to expect a total of four rate hikes this year, up from three in 2017. Many experts predict that the next hike will occur at the September meeting next month.
Today’s Policy Statement
Here’s a summary of what the Fed says.
Job gains have been strong, on average, in recent months, and the unemployment rate has stayed pretty low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.
Not Cast In Concrete
However, the committee left itself some wiggle room in case the economy changes for the worse. If employment stalls, the housing market teeters, or industry tanks (there is a trade war on, which can change things quickly), the expected rate increases may not materialize.
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective.
*This article does not represent legal interpretation or advice. This is not a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet LTV requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over life of loan. Reduction in payments may reflect longer loan term. Terms of the loan may be subject to payment of points and fees by the applicant. Seattle Mortgage Brokers, LLC NMLS: LO# 305371 MB# 761615