Simple explanation of the Fed's Vote on Fed Funds Rate...

By
Real Estate Broker/Owner with LORI BLANK & ASSOCIATES, LLC

Wednesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was nearly unanimous, with just one dissenting voter. There were 3 dissenters at each of the FOMC’s last two meetings.

In its press release, the Federal Reserve presented an improved outlook for the U.S. economy, noting that since its last meeting in September, there’s new evidence that the economy “strengthened somewhat” in the third quarter.

One example cited is that consumer and business spending continues to rise while inflationary pressures on the economy remain modest. This indicates controlled growth — a plus in a recovering economy.

The economy remains slowed by a number of factors, though, as noted by the Fed :

  1. “Continuing weakness” in the labor market
  2. Softness in commercial real estate
  3. A “depressed” housing market

In response to mixed economic conditions, the FOMC opted to “do nothing” today; it introduced no new monetary policy, and revised none of its existing market stimulus. The Fed re-iterated its plan to leave the Fed Funds Rate in its current range near 0.000 percent “at least until mid-2013″ and affirmed “Operation Twist” — the program in which the Fed sells Treasury securities with a maturity of 3 years or less, and uses the proceeds to buy mortgage bonds with maturity between 6 and 30 years.

Mortgage market reaction to the FOMC statement has been negative this afternoon. Mortgage rates are rising because analysts expected the Fed to launch new, bigger stimulus plans. It didn’t. Rates may drift higher for the new few days, too.

Therefore, it today’s mortgage rates fit your household budget, consider locking in a mortgage rate. Mortgage rates are very low right now, relative to history. It may not last.

The FOMC’s next meeting — its last scheduled meeting of the year — is December 13, 2011.

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Ambassador
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Florida Tolbert Team Keller Williams Advantage
Keller Williams Advantage III Realty in Lake Nona - Orlando, FL
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Just saying thank you for not doing anything to make things worse as we finally are showing signs of life in real estate and jobs. 

Nov 03, 2011 02:22 PM #1
Rainer
407,272
Randy Ostrander
Lake and Lodge Realty LLC - Big Rapids, MI
Real Estate Broker, Serving Big Rapids and West Central MI

Good evening Lori. If we could just have the Government stop fixing things for a while longer we might pull out of this. lol

Nov 03, 2011 02:42 PM #2
Rainmaker
3,062,108
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Lori - Thank you for sharing detailed information on the Feds voted to keep the Fed funds unchanged.

Nov 03, 2011 04:49 PM #3
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Rainer
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Lori Blank

Lori Blank & Associates, LLC
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