FOMC Minutes Suggest QE Tapering by Year-End The minutes for June's meeting of the Federal Open Market Committee (FOMC) suggest that committee members are mostly in agreement that the current quantitative easing program (QE) should begin winding down by year end, but the committee minutes are very clear concerning the committee's intention to monitor inflation and ongoing economic and financial developments before taking action to reduce the current rate of QE. The Fed currently purchases $85 billion monthly in Treasury securities and mortgage-backed securities (MBS). Investors fear that if … [Read more...]
Fed Meeting Minutes Expose Rising Interest Rate Risk
Minutes of the April/May Federal Open Market Committee (FOMC) recently released may have a significant impact on mortgage rates going forward. One significant development from the meeting suggests that the present quantitative easing (QE) program may be modified in the near future. The current QE program involves the Fed purchasing $85 billion per month in mortgage backed securities (MBS) and Treasury bonds. The Fed's goal with QE is keeping long-term interest rates, including mortgage rates, low. Considerations mentioned in favor of slowing the current QE program include … [Read more...]
Fed Meeting Statement Points To Continuing Low Interest Rates
Wednesday's Federal Open Market Committee (FOMC) statement indicates the Federal Reserve's commitment to keeping long term interest rates and inflation under control. The Fed will continue monitoring inflation, but does not expect inflation to rise more than 0.50 percent above its target rate of 2.00 percent over the next one to two years. Ongoing monitoring of inflation and unemployment, as well as developing economic news, will guide the Fed in its future determinations concerning policy for its present iteration of quantitative easing (QE3). Currently, the Fed purchases $85 billion of … [Read more...]
Fed Meeting Minutes Reveal Rising Wealth Among Homeowners
The minutes for the Federal Open Market Committee (FOMC) meeting held March 19 and 20 were released on Wednesday April 10, 2013. These periodic meetings by the FOMC cover a wide ranging group of topics that impact the overall economy in the United States. The decisions made and acted upon from the FOMC meetings often sway the real estate and residential financing markets. Some highlights of the recent FOMC minutes for the March meeting include: Jobs and Unemployment Gaining Steam The unemployment rate fell to 7.7 percent in February. While lower than the average unemployment rate for Q4 2012, … [Read more...]
Fed Meeting Statement Reveals Good News For Real Estate
The Federal Reserve's statement after yesterday's Federal Open Market Committee (FOMC) meeting left no doubt as to the Fed's dual commitment to keeping long term interest rates down and encouraging economic growth. No changes to the Fed's current bond-buying program were made during today's FOMC meeting. The Fed's monthly purchase of $85 billion in bonds and MBS works by boosting bond prices, which typically helps with keeping mortgage rates lower. The Fed reaffirmed its position that it will not withdraw or reduce monetary easing until the unemployment rate is substantially lower. … [Read more...]