Sep 13, 2012 | Federal Reserve
The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Thursday. For the eighth consecutive meeting, the vote was nearly unanimous.
Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that the U.S. economy has been expanding “at a moderate pace” in recent months, led by growth in household spending. However, “strains in global financial markets” remain a significant threat to growth in the near-term, a remark made in reference to the Eurozone and its sovereign debt and recession issues.
The Fed’s statement also included the following economic observations :
- Growth in employment has been slow with unemployment elevated
- Inflation has been subdued, despite rising gas and oil prices
- Business spending on equipment and structures has slowed
In addition, the Fed addressed the housing market, stating that there have been signs of improvement, “albeit from a depressed level”. (more…)
Sep 13, 2012 | Federal Reserve
The Federal Open Market Committee ends a 2-day meeting today, the group’s sixth of 8 scheduled meetings this year. As a Massachusetts home buyer or would-be refinancer, be ready for mortgage rates to change.
The Federal Open Market Committee is a 12-person sub-committee of the Federal Reserve. Led by Fed Chairman Ben Bernanke, it’s the group within the Fed tasked with voting on U.S. monetary policy.
The act for which the FOMC is most well-known is its management of the Fed Funds Rate. The Fed Funds Rate is the interest rate at which banks borrow money from each other overnight. It’s one of several interest rates under Federal Reserve management.
“Mortgage rates”, however, is not among them. (more…)
Aug 24, 2012 | Federal Reserve
Eariler this week, the Federal Reserve released the minutes from its 2-day meeting which ended August 1, 2012. Since the release, mortgage rates have dropped.
The Fed Minutes are released on a schedule, three weeks after the FOMC adjourns from one of its 8 scheduled meetings of the year.
The Fed Minutes are meeting minutes; like you’d see after a corporation shareholder meeting, or after a condo board meeting. Specifically, the Fed Minutes details the conversations among Federal Reserve members which shape our nation’s economic policy.
The most recent Fed Minutes show a central bank closer to adding new market stimulus that previously believed.
At its last meeting, the Federal Reserve’s debate focused on the rate of economic growth and whether it was occurring too slowly to be long-lasting. The Fed appears to think so. Without a “substantial and sustainable strengthening” in the pace of economic expansion, it said, additional monetary stimulus would be “warranted fairly soon”. (more…)
Aug 1, 2012 | Federal Reserve
The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday. The vote was nearly unanimous.
Only one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that the U.S. economy has “decelerated somewhat” since January. Beyond the next few quarters, though, the Fed expects growth to “remain moderate” and then gradually pick up. (more…)
Jul 31, 2012 | Federal Reserve
In Washington, D.C. today, the Federal Open Market Committee (FOMC) begins a 2-day meeting, its fifth of 8 scheduled meetings this year.
Mortgage rates are expected to change upon the FOMC’s adjournment. Rate shoppers and home buyers of Massachusetts would do well to be alert.
The Federal Open Market Committee is a rotating 12-person subcommittee within the Federal Reserve. It’s the group which makes U.S. monetary policy.
“Making monetary policy” has many meanings but the action for which the FOMC is most well-known is its setting of the Fed Funds Funds. The Fed Funds Rate is the prescribed interest rate at which banks borrow money from each other overnight.
Since late-2008, the Fed Funds Rate has been near zero percent.
The Fed Funds Rate and Freddie Mac’s 30-year fixed rate mortgage rate move along different paths. Sometimes, the two converge. Other times, they diverge. They’ve been separated by as much as 529 basis points in the past 12 years, and they’ve have been as near to each other as 52 basis points.
Clearly, there’s no correlation between the Fed’s Fed Funds Rate and the common 30-year mortgage. However, with its words, the Federal Reserve (more…)
Jul 12, 2012 | Federal Reserve
The Federal Reserve released the minutes from its June Federal Open Market Committee meeting, revealing a Fed divided on the future of the U.S. economy. Mortgage rates are higher after the release of the minutes.
The Fed Minutes is the detailed recap of an FOMC meeting. It is the companion piece to the more brief, more well-known post-meeting FOMC press release.
For a comparison, whereas the Fed’s June 20, 2012 press release contained 5 paragraphs and 490 words, the same meeting’s minutes contain 62 paragraphs and 7,508 words. The extra detail afforded by the extra words Wall Street gives insight into the nation’s central banker.
The June Fed Minutes, for example, suggest that the Fed may soon add new economic stimulus.
Recent data suggests that the U.S. economy is expanding, but more slowly that it was at the start of the year. The Fed acknowledged that this, in part, is the result of “below-trend” growth in Euro-area economies, (more…)
