Fed Keeps Funds Rate at 5.25%
Mortgage News from Quicken Loans
The Federal Open Market Committee (FOMC, Fed) has decided for the eighth consecutive meeting to maintain the current Fed Funds Rate (the overnight rate at which banks lend to each other) at 5.25%. This decision reflects further evidence that the housing market is showing signs of stabilization. This decision impacts consumers with adjustable-rate mortgages, home equity lines of credit and credit cards. The Fed meets eight times a year and is scheduled to meet again, August 7th.
This decision was generally expected by the financial markets, according to Bob Walters, chief economist of Quicken Loans, the nation's largest online lender.
"The Fed did not shock anyone with its decision to leave the Fed Funds Rate unchanged at 5.25 percent, particularly the markets, which had already priced in another pause in advance of today's announcement," Walters said. "What was most important coming out of today's meeting was the tone of the Fed's announcement, which can itself cause mortgage rates to fluctuate. As in past reports, the Fed showed concern over inflation, but feels these concerns should diminish over time. Given the tone of the Fed's statement, I doubt we will see much movement in mortgage rates."This article is reprinted by permission from Quicken Loans © 2007 Quicken Loans Inc. All rights reserved.
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