The FED has made the decision to keep the funds rate at its current level. There was one dissenting vote regarding the rate stance. The full article can be found here. Highlights are listed below.
- The consensus is to keep the rate near zero for the next several months
- The FED will continue to as planned to end its 1.25 trillion dollar purchase Mortgage Backed Security purchase program on March 31st. The conventional wisdom is that the rise in interest rates will be modest at about .50%
- On February 1st they plan to stop a number of programs brought about to stabilize the financial markets in the aftermath of the crash of the credit markets. Some of these are: emergency credit to investment banks, loans of dollars through foreign central banks and the support of the commercial paper market.
- One item to note is that the FED removed the reference in their statement regarding the improving housing sector.
In the end they left the option to intervene in the MBS market if the economy sours. Let us all hope that the economy is turning the corner and unemployment, which is thought of as a lagging economic indicator, will improve soon.
925.964.1213 Direct // 925.570.0613 Mobile
Cari's Website Tri Valley Mortgage News East Bay Mortgage News
Cari CA Real Estate Broker License 01220718...NMLS License ID 234849
