Monthly Fed meeting: More of the same

Chart courtesy of qz.com

 

The Federal Reserve board announced on Wednesday afternoon what many had expected: Interest rates will continue to remain low for an extended amount of time, even if unemployment rates drop below 6.5 percent. The Fed will instead rely on a variety of other economic indicators to determine when to raise interest rates.

Fed officials have stated they are looking for key factors such as wage growth, inflation and more house-building permits as signs of a more robust economy before thinking about raising interest rates.

With that being said, however, the Fed is moving ahead with plans to continue tapering its monthly purchases of bonds and treasuries, down to $55 billion a month in April. These monthly bond purchases, initially set at $85 billion a month, were intended to help jumpstart a sluggish economy. Last month's jobs report was better than anticipated, but still suggest an economy in recovery period.

As far as mortgage rates, they will continue to mirror changes in the stock market. After Fed chief Janet Yellen made her remarks today, stocks fell and, along with them, mortgage rates. It appears the markets will continue waiting for more concrete signs of economic improvement before rates rise again.

Confusing data? If you have any questions about getting a mortgage for a new purchase or refinance, contact a Vertex loan officer to help you navigate the process and lock in the best rate for you.