A Simple Explanation Of The Federal Reserve Statement (January 26, 2011 Edition)

By
Mortgage and Lending with Pacor Mortgage Corp

Putting the FOMC statement in plain EnglishToday, the Federal Open Market Committee voted 10-to-0 to leave the Fed Funds Rate unchanged within its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that since December's meeting, economic growth is ongoing, but at a pace deemed "insufficient" to make a material impact on the jobs market. In addition, the Fed said household spending "picked up" late last year, although it continues to be held back by joblessness, tight credit and lower housing wealth.

This is similar to the language used in the FOMC's November and December 2010 statements.

Also like its last two statements, the Fed used this month's press release to re-affirm its plan to keep the Fed Funds Rate near zero percent "for an extended period", and to keep its $600 billion bond market support package in place.

And finally, of particular interest to Beverly home buyers and mortgage rate shoppers, for the second straight month, the Federal Open Market Committee's statement contained an entire paragraph detailing the Federal Reserve's dual mandate of managing inflation levels, while fostering maximum employment. 

The Fed acknowledges progress toward this goal, but calls that progress "disappointingly slow". Inflation is too low right now, and joblessness too high.

Over time, the Fed expects both measurements to improve.

Mortgage market reaction to the FOMC has been positive since the statement's release. Mortgage rates in Chicago are unchanged, but poised to improve.

The FOMC's next scheduled meeting is a 1-day event, March 15, 2011.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Mortgage / Finance
Location:
Illinois Cook County Oak Lawn
Groups:
Chicago Area Real Estate BUZZ!
Chicago-Northern Illinois Real Estate
Chicagoland and Northern Illinois Real Estate
NAPERVILLE ILLINOIS REALTORS
Tags:
federal reserve
fed funds rate

Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
170,895

Kevin Lanham

Chicagoland FHA Expert
Ask me a question
*
*
*
*

Additional Information