The Fed’s Open Market Committed left rates unchanged. The 9-1 vote leaves the Fed Funds Rate at 0.000-0.250%.
In its press release, the highlights were three-fold:
- Economy: “has continued to strengthen”
- Jobs Market: “is stabilizing”
- Business Spending: “has risen significantly”.
This is six meetings in a row with an optimistic outlook. The 2008-2009 recession is slowly going away and the economy is growing. It’s not perfect and the economy still has threats:
- High unemployment threatens consumer spending
- Housing starts are at a “depressed level”
- Consumer credit remains tight
The overall tone was positive inflation is within limits. We don’t have another Fed meeting until April 27-28.
FHA interest rates responded positively to the news and we avoided a massive sell-off that would have pushed loan rates higher.
The next big looming threat is the end of the $1.25 trillion commitment to the mortgage market by March 31, 2010. Fed insiders estimate that the bond-buying program lowered mortgage rates by 1 percent since its start.
Tags: Fed Funds Rate, FHA Interest Rates, FOMC