Jun 20, 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.
For the fifth consecutive meeting, the Fed Funds Rate 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 moderately” this year. Beyond the next few quarters, the Fed expects growth to “pick up very gradually”.
In addition, the Fed re-acknowledged (more…)
May 18, 2012 | Federal Reserve
The Federal Open Market Committee released its April 2012 meeting minutes this week, revealing a Federal Reserve in the ready in the event additional monetary stimulus is needed.
The Fed Minutes function much like the minutes from a business meeting; or, condominium association meeting, for example. It’s a detailed review of the conversations and debates between FOMC members, and is typically published 3 weeks after a Federal Reserve meeting.
The Fed Minutes is a follow-up statement on the FOMC’s more well-known, post-meeting press release. It’s also much more lengthy.
Whereas the April 25, 2012 press release totaled 444 words, the Fed Minutes spanned 6,618.
Those extra words are important, too, because the detail offered within the Fed Minutes lends insight into how our nation’s central bank views the U.S. economy, its strengths and weaknesses, and its threats.
From the Fed Minutes, some of the Fed’s comments includes :
- On employment : Unemployment may remain elevated through 2014
- On housing : Tight underwriting is “holding down” the housing market
- On rates : The Fed Funds Rate should remain low until late-2014
There was also substantial talk about Europe and its role in the U.S. economy. Notably, U.S. financial institutions have been actively reducing their European exposure to contain damage in the event of a full-blown economic crisis abroad.
This has had the net effect of lowering mortgage rates in Worcester County area. Mortgage bonds often benefit from economic uncertainty.
In addition, because several Fed members acknowledged a willingness to add new stimulus to the U.S. economy, mortgage markets are accounting for the possibility it could happen. It’s unclear whether stimulus would be added after the Fed’s next meeting, or at some point later in the year, or at all.
The FOMC has its next scheduled meeting June 19-20, 2012.
Apr 25, 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.
For the fifth consecutive month, the Fed Funds Rate 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. It is expected to remain near-zero through 2014, at least.
In its press release, the Federal Reserve noted that the U.S. economy has been “expanding moderately” since the FOMC’s last meeting in March. Beyond the next few quarters, the Fed expects growth to “pick up gradually”.
This key phrase will likely be repeated by the press. It suggests that the economy is no longer contracting; instead moving along a path of slow, consistent expansion. (more…)
Apr 4, 2012 | Federal Reserve
The Federal Reserve has released the minutes from its last FOMC meeting, a 1-day affair held March 13, 2012. Mortgage rates in Worcester County area are rising on the news.
For the un-indoctrinated, 3 weeks after it meets, the Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes.
Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.
The Fed Minutes is a lengthy publication, often filling 10 pages or more. By contrast, the more well-known publication from the FOMC — its post-meeting press release — tends to span 6 paragraphs or less.
The extra detail contained within the Fed Minutes is Wall Street fodder, especially given the current economic uncertainty. Investors look to the Federal Reserve for clues about what’s next for the U.S. economy.
Lately, the minutes has made an out-sized impact on mortgage rates. The Fed’s words continue to swing the mortgage-backed bond market.
Today is no different.
March’s Fed Minutes is a dense one and markets are reacting. (more…)
Mar 13, 2012 | Federal Reserve
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.
For the fourth consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008. It is expected to remain near-zero through 2014, at least.
In its press release, the Federal Reserve noted that the the U.S. economy has “expanded moderately” since the FOMC’s January 2012 meeting, adding that growth is occurring despite “strains in the global financial markets” that pose “significant downside risks” to long-term outlooks.
The Federal Reserve now expects moderate economic expansion (more…)
Mar 13, 2012 | Federal Reserve
The Federal Open Market Committee meets today, its second of 8 scheduled meetings this year. As a home buyer or would-be refinancing household , get ready for changing mortgage rates.
The Federal Open Market Committee is the 12-person sub-committee within the Federal Reserve that votes on the nation’s monetary policy. Led by Federal Reserve Chairman Ben Bernanke, the FOMC’s most prominent role is as steward for the Fed Funds Rate.
The Fed has said repeatedly that it intends to keep the Fed Funds Rate near 0.000 for an “extended period of time”, through 2014 at least.
Unfortunately, this doesn’t mean that Worcester County area mortgage rates will remain low as well. Mortgage rates are not set by the Federal Open Market Committee. Mortgage rates are set by Wall Street.
As proof that the Fed Funds Rate is distinct from mortgage rates, (more…)
