Fed Leaves Interest Rates Unchanged Again
Mortgage News from Quicken Loans
For the seventh consecutive time, the Federal Reserve Open Market Committee decided to maintain the Fed Funds Rate at 5.25%. The Fed Funds Rate, the overnight rate at which banks lend to each other, affects short-term interest rates such as those on adjustable rate mortgages, credit cards and home equity lines of credit.
This decision was almost universally expected by the financial markets, according to Bob Walters, chief economist of Quicken Loans.
"It was a foregone conclusion that the Fed would leave short term rates unchanged at 5.25%, as it has at its past six meetings. What the interest rate markets were looking to see, was if the tenor of the language in the Fed's release would give insight as to whether the Fed is more concerned about prices increasing or if they worry more about an economic slowdown. The Fed's press release again affirmed that the Fed is a bit more concerned about inflation than economic softness," says Walters. "Early reaction from the interest rate markets was muted and interest rates, right after the announcement, were largely unchanged."
This article is reprinted by permission from Quicken Loans © 2007 Quicken Loans Inc. All rights reserved.
Find the most up to date real estate news!
Find more mortgage related news! View all our mortgage news.
