The US Federal Reserve left the rate unchanged at 5.25-5.5%

Dacey Rankins
Membru
Alăturat: 2023-09-14 20:10:55
2023-11-02 17:16:09

It keeps the rate at the same level for the second time, but still allows for a possible increase
The U.S. Federal Reserve left the rate at 5.25-5.5%, the Federal Open Market Committee said in a statement. In a statement, the Fed noted that economic activity grew at a rapid pace in the third quarter. At the same time, inflation remained high.

"Tighter financial and credit conditions for households and businesses are likely to put pressure on economic activity, hiring and inflation. The extent of these effects remains uncertain," the Fed said in a statement.

However, the committee continues to allow for further tightening of monetary policy over time. At the same time, the Fed will continue to reduce holdings of Treasury securities, agency debt and agency mortgage-backed securities. However, the agency also allows for an adjustment of its position on the issue of monetary policy, in case there are risks that could interfere with its goal of returning inflation to the level of 2%.

According to CME Group, which publishes statistics on rate expectations, a few hours before the Fed meeting, 99.2% of investors surveyed expected the agency to leave the rate unchanged at 5.25-5.5%. At the same time, only 0.8% of investors still expected that the rate would be raised to 5.5-5.75%.

At the end of the last meeting at the end of September 2023, the Fed allowed a rate hike if necessary.

"In determining the extent of additional policy tightening that may be appropriate to return inflation to 2% over time, the committee will take into account how quickly monetary policy affects economic activity and inflation, as well as economic and financial factors and events," the release said at the time.

Carter Zepress
Membru
Alăturat: 2023-11-09 20:08:51
2023-11-09 23:21:34

Although 15-year and 30-year mortgage rates are fixed and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.

The average rate for a 30-year, fixed-rate mortgage is up to 8%, the highest in 23 years, according to Bankrate.

Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.

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