The Federal Reserve Is Meeting And What It Means To Your Mortgage Rate
Alright first time home buyers, Renton home seller, anyone investing in Seattle property and anyone else that is effected by King County Home Prices. Here is the latest. (and I'm already predicting there will not be any immediate change.)
The Federal Open Market Committee begins a scheduled, 2-day meeting yesterday to discuss the country's monetary policy. As is custom, the group will issue a press release to the markets upon adjournment.
There are 8 scheduled FOMC get-togethers annually and the post-meeting press releases are among the most powerful market-moving events of the year. (usually but probably not this time)
It's not the Fed's actual policy changes that causes fortunes to be won or lost, though.
These changes can predicted and traded -- and, therefore, hedged -- on Wall Street using Fed Funds Rate Futures. For example, Wall Street predicts with 97% certainty that the Federal Reserve will not make a policy change at this time.
As opposed to than policy change, it's the verbiage of the FOMC's press release that can really move markets. This is because the press release is a clear-eyed look into what the Federal Reserve thinks of the United States economy -- its strengths, its weaknesses, and its threats. Now since Chairman Bernanke was just on CBS and was given softball questions I don't think there will be a huge amount of info in the "verbiage". In my humble opinion, there are too many aspects of the US and World financial picture that have to shake out in the next few months to make much change today.
After its January 2009 meeting, the FOMC's press release said:
- The economy has weakened further
- Employment has declined steeply
- A gradual recovery may come later in 2009
Since that meeting, though, a number of high-profile economists, including Fed Chairman Ben Bernanke, have said the likelihood of economic recovery increased for late-2009.
This is why tomorrow's FOMC press release is so important. It will contain clues about the Federal Reserve's next steps and current psyche. But immediately it may or may not make a significant impact on the mortgage markets.
In the end, it's what the Fed says that matters more than what the Fed does. The FOMC is expected to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.
HIGHLIGHT, BOLD, CAPITALIZE, UNDERSCORE AND ITALICIZE THIS: RATES ARE AS LOW AS THEY CAN GO AND AS LOW AS THEY WILL GO. !!!!!! add in some EXCLAMATION POINTS TOO!!!!!! IT IS A GREAT TIME TO BUY A RENTON HOME OR TOWNHOME.
PLUS many of you can utilize the $8000 IRS Tax credit. Call the Gary McNinch Team, sign up on our web home searches, or shoot us an email or twitter us at Rentonhomefinde and we will be glad to show you how to get qualified to buy a great Renton or Kennydale home. Our business is educating our buyers and sellers and finding great deals for our investor clients.
(Image courtesy: Wall Street Journal)
Comments(1)