Federal Reserve Holds Rates - Eyes Mortgage Market
Mortgage News from Quicken Loans
For the ninth 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.
Quicken Loans Chief Economist Bob Walters said the Fed did not go far enough.
"While the Federal Reserve did acknowledge the tightening of credit in their statement, they may not have gone far enough," Walters said. "The role of a strong central bank, such as the Fed, is to reign in the markets when they begin to act irrationally as appears to be the case now. We can only hope that Wall Street will be bolstered by the Fed's confidence in the long-term outlook and that we can return to a more reasonable lending environment in short order."
This article is reprinted by permission from Quicken Loans © 2007 Quicken Loans Inc. All rights reserved.
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