Archive for FOMC Minutes
The Fed Minutes Keep Lake Geneva Mortgage Rates On Hold (For Now)
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The Federal Reserve released its December 14 meeting minutes Tuesday afternoon. There wasn’t much there to disturb Lake Geneva mortgage markets, thankfully.
The “Fed Minutes” is an official recap of the most recent meeting of the Federal Open Market Committee. It’s published 8 times annually, 3 weeks after the FOMC adjourns.
The Fed Minutes is similar to the meeting minutes released after a corporate conference or condo association gathering in that they provide additional details about the conversation and debate that occurred between meeting attendees.
The Fed Minutes are a lengthy companion to the Federal Reserve’s brief, more well-known, post-meeting press release. But, whereas the press release is measured in paragraphs, the minutes are measured in pages.
Here is some of what the Fed discussed last month:
- On inflation: Core inflation levels “trend lower”; disinflation risks are low.
- On housing: The market is still “quite depressed”; demand is “very weak.”
- On stimulus: The Fed will stick to its $600 billion support plan
In response, conforming mortgage rates for Lake Geneva real estate are unchanged today.
The no-change in rates is welcome news for this month’s home buyers and other people wanting to get a jump on the “Spring Buying Season.” Lake Geneva mortgage rates have been trending higher since November, erasing 7 months of gains in 7 weeks, and rapidly approaching the psychologically-important 5 percent figure.
Currently, Freddie Mac reports the average 30-year fixed mortgage rate as 4.86%.
As compared to November, mortgage rates are higher. As compared to history, however, mortgage rates remain low. If you are still floating a rate, or have otherwise not locked, your opportunity may be ending. Once the economy moves to higher gear, mortgage rates will be among the first of the casualties.
A Simple Explanation Of The Federal Reserve Statement (March 16, 2010 Edition)
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Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged, in its target range of 0.000-0.250 percent.
In its press release, the FOMC noted that the U.S. economy “has continued to strengthen” and that the jobs markets “is stabilizing.” It also said that business spending has “has risen significantly.”
This is a slight departure from the Fed’s January statement in which housing was not mentioned and business spending was said to be “picking up.”
It’s also the sixth straight statement from the FOMC in which the Fed described the economy with optimism. This is a signal to markets that 2008-2009 recession is over and that economic growth is returning.
The economy is not without threats, however, and the Fed identified several:
- High unemployment threatens consumer spending
- Housing starts are at a “depressed level”
- Consumer credit remains tight
The message’s overall tone, however, remained positive and inflation is within tolerance limits
Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to end its $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.
Mortgage market reaction to the Fed press release is, in general, ambivalent. Mortgage rates in Lake Geneva are unchanged this afternoon. Which is good news for Lake Geneva real estate buyers.
The FOMC’s next scheduled meeting is a 2-day affair, April 27-28, 2010.
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Asst Vice President
1221 South Shore Drive
Delavan, Wisconsin, 53115 US |
Work: 262-728-6209
Mobile: 262-745-5055
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Lender, Lake Geneva Real Estate
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Mortgage markets reeled Wednesday after the Federal Reserve released the minutes from its January 26-27, 2010 meeting. Mortgage rates in Lake Geneva, Wisconsin are now at their highest levels since the start of the year.
The Fed Minutes is a follow-up document, delivered 3 weeks after an official FOMC meeting. It’s a companion piece to the post-meeting press release, detailing the debates and discussions that shaped our central bankers’ policy decisions.
The Minutes is a terrific look into the Fed’s collective mind and, yesterday, Wall Street didn’t like what it saw. Specifically, the report disclosed that:
- The Fed plans to break support for mortgage markets after March 31, 2010
- Raising the Fed Funds Rate will be a key part of the Fed’s strategy to tighten monetary policy
- The fundamentals behind consumer spending strengthened modestly
Furthermore, the Fed Minutes said that there is a growing risk of “higher medium-term inflation.” Inflation, of course, is awful for Lake Geneva real estate mortgage rates.
Overall, the Fed’s economic optimism appeared stronger after its January meeting as compared to its December one. A stronger economy should lead to better job growth and higher home prices throughout 2010.
Mortgage rates were up yesterday but they remain historically low. And many analysts think that after March 31, 2010, rates will rise even more. Therefore, if you’re buying a home in the near-term, or know you’ll need a new mortgage, consider moving up your time frame.
Every 1/8 percent makes a difference in your household budget.
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Travis Egan
Asst Vice President / Loan Officer
1221 South Shore Drive
Delavan, Wisconsin, 53115 US |
Work: 262-728-6209
Mobile: 262-745-5055
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Lender, Lake Geneva Real Estate
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