What did the Feds to today Aug. 10th 2010

Posted by Barry Lynn Miller on Tuesday, August 10th, 2010 at 5:13pm.

Aug. 10th 2010, was their first meeting in right at 6 weeks, the Federal Open Market Committee had a vote this afternoon 9-1 in favor to leave the Fed Funds Rate unchanged.   The Fed Fund Rate will remain at a historical low, within a target range of 0.000-0.250 percent.  In the press release, they (the FOMC) stated that, since around June, the pace of economic recovery “has slowed”. We are showing signs of household spending increased but for the most part conditions remain restrained because of higher and higher levels of unemployment, declining home values, and stronger credit guidelines.

The statements made today, relates to me that there is less economic optimism as compared to the previous year’s FOMC statements. The Fed is hoping for growth to be “more modest in the near-term” than its previous expectations.  The Fed also highlighted some strengths in the economy, too:

  1. Ongoing growth on a national level
  2. Inflation levels remain low
  3. Business spending is on the rise

As anticipated, the Fed re-affirmed its plan to maintain the Fed Funds Rate near 0% “for an undisclosed period”.  The Fed’s statement were oredicted so, as a result, the mortgage market’s reaction to the release has been neutral. Mortgage rates in Alabama are unchanged this afternoon. 

This is from the FOMC

"Voting against the policy was Thomas M. Hoenig, who judges that the economy is recovering modestly, as projected. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and limits the Committee's ability to adjust policy when needed. In addition, given economic and financial conditions, Mr. Hoenig did not believe that keeping constant the size of the Federal Reserve's holdings of longer-term securities at their current level was required to support a return to the Committee's policy objectives."

To read the full Press Release click here

All this being said your monthly payment will still be going up after September 7th 2010 because of the FHA MI changes

For all your Alabama Real Estate needs give an Executive a Call

Sincerly Yours

 

Barry Lynn Miller

Keller Williams Trussville

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