Upcoming FOMC Meeting and the Effect on Mortgage Rates
The Federal Reserve will be conducting one of its eight scheduled FOMC meetings at the end of April.
The Federal Open Market Committee meeting will set the stage for a wide variety of speculation as to whether or not the Fed will likely continue with its course of lowering the Fed Funds rate, which presently stands at 2.
25%.
Economists are lining up on both sides of the argument and can make valid points both for a further reduction and for a pause in lowering rates.
The sentiment for most economists who believe the Fed should continue to lower the Fed Funds rate is based on two major challenges seen into today's economy.
The job market has lost jobs both in February and March of this year.
A net loss of jobs is a sure sign that our economy is in a recession period.
The other key component for those in favor of a further reduction to the Fed Funds rate is that the housing market is still in a tails spin.
Almost all of the recent reports on housing show that the market is not close to bottoming out and that home buyers are still hesitant to move forward.
The supply of homes continues to grow and foreclosures are a large problem that is impacting home values.
The argument for continuing to lower the Fed Funds rate is strictly based on the belief that added liquidity will spur lenders to ease guidelines and bring more buyers into the market.
The argument against a further reduction of the Fed Funds rate is based on concerns over the long term damage this is going to have on the economy.
The concern on this front is largely based on the effects this has with the value of the U.
S.
dollar and its role within the global economy.
The dramatic rise in oil prices is going to have a significant impact in inflation for the balance of the year.
A recent food shortage in many poorer nations is believed to be tied directly into the falling value of the U.
S.
dollar and economy.
The direct impact to mortgage rates will be hard to predict.
Mortgage rates have been moving up since bottoming out in January of this year.
More investors appear to being moving back into the stock market, but it is likely to continue to be very volatile for the next few months.
Locking into a low rate mortgage will simply involve timing the right dip in the market and navigating the economic news that will be released over the next few weeks.
The Federal Open Market Committee meeting will set the stage for a wide variety of speculation as to whether or not the Fed will likely continue with its course of lowering the Fed Funds rate, which presently stands at 2.
25%.
Economists are lining up on both sides of the argument and can make valid points both for a further reduction and for a pause in lowering rates.
The sentiment for most economists who believe the Fed should continue to lower the Fed Funds rate is based on two major challenges seen into today's economy.
The job market has lost jobs both in February and March of this year.
A net loss of jobs is a sure sign that our economy is in a recession period.
The other key component for those in favor of a further reduction to the Fed Funds rate is that the housing market is still in a tails spin.
Almost all of the recent reports on housing show that the market is not close to bottoming out and that home buyers are still hesitant to move forward.
The supply of homes continues to grow and foreclosures are a large problem that is impacting home values.
The argument for continuing to lower the Fed Funds rate is strictly based on the belief that added liquidity will spur lenders to ease guidelines and bring more buyers into the market.
The argument against a further reduction of the Fed Funds rate is based on concerns over the long term damage this is going to have on the economy.
The concern on this front is largely based on the effects this has with the value of the U.
S.
dollar and its role within the global economy.
The dramatic rise in oil prices is going to have a significant impact in inflation for the balance of the year.
A recent food shortage in many poorer nations is believed to be tied directly into the falling value of the U.
S.
dollar and economy.
The direct impact to mortgage rates will be hard to predict.
Mortgage rates have been moving up since bottoming out in January of this year.
More investors appear to being moving back into the stock market, but it is likely to continue to be very volatile for the next few months.
Locking into a low rate mortgage will simply involve timing the right dip in the market and navigating the economic news that will be released over the next few weeks.
