Surprise The Fed Leave the Rate alone
Surprise, Suprise, on Tuesday March 14th, the Federal Open Market Committee voted to leave the Fed Funds Rate the same. This is the rate the Federal Reserve charges banks to borrower money. The range is presently at ZERO Percent 0.00.
The vote was unanimous making it the fourth consecutive month that the board agrees to leave the rate alone. Only one FOMC member did not agree making a 9 to 1 vote.
The Fed Funds Rate has been near zero or at zero percent since December 2008. Its is not a surprise because they have stated they will not expect to change the rate until at least 2014.
The Federal Reserve expects moderate economic expansion in the next few quarters and an slow pace of improvement in the national Unemployment Rate.
The Fed still beleives that housing remains “depressed”, Labor conditions have “improved further” and Household spending has “continued to advance”.
With respect to inflation, the Fed said that rising oil and gasoline prices will “push up” inflation temporarily, but not over the long-term.
After the FOMC’s statement, mortgage markets worsened slightly, pressuring mortgage rates higher. Which translates to a slightly higher rate to you today.
The FOMC’s next scheduled meeting is a two-day event slated for 4/24 or 4/25 2012.
Want to know how these things really affect you? Call Good Living Realty and one of our agents will help you. No obligation necessary.
Eddie Gutierrez
