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A brief recap of the Federal Open Market Committee's December 16, 2009 statement and what it means for mortgage rates, homeowners, and the economy.
A brief recap of the Federal Open Market Committee's November 4, 2009 statement and what it means for mortgage rates, homeowners, and the economy.
Recapping the Federal Open Market Committee's September 23, 2009 statement and what it means for mortgage rates, homeowners, and the economy.
The Federal Reserve does not set mortgage rates. Mortgage rates are based on the raw price of mortgage-backed securities plus applicable loan-level pricing adjustments. Or, with respect to jumbo mortgages, rates get set by individual banks. The Fed does, however, influence rates.
Dan Green reviews the Federal Open Market Committee's decision to leave the Fed Funds Rate in its target range, plus the impact on mortgage rates going forward.
The Fed Funds Rate is in a "target range" of 0.000-0.250 percent -- the lowest it's been history. It's a stimulative position for the economy and markets don't expect the rate to change. Based on trading in Fed Funds Futures, Wall Street predicts with 100% certainty that the Federal Open Market Committee will vote to leave the Fed Funds Rate unchanged. However, just because the Fed Funds Rate will be staying as-is doesn't mean that mortgage rates will, too.
The Federal Reserve is the central bank of the United States. It was originally created to prevent financial crises by controlling how quickly money flows through banks and businesses. The biggest weapon in the Fed's arsenal to control to the flow of money is the ability to manipulate short-term interest rates. The FOMC assesses the benefits and risks of adjusting short-term rates during their periodic meetings. The FOMC meets eight times annually.
