As expected the FED did not raise rates at this week's meeting. The Fed says:
Uncertainty over inflation outlook remains high while downside risk to growth has diminished.
The news is considered to be neutral to slightly negative.
Initially the market sold off on the news but has been improving in the past 30 minutes and we will probably not see a significant change in interest rates at this time. In my opinion the statement from the Fed is a bit harsh. It did not balance the inflation/risk of recession side of things as the market had hoped for. It is possible that the market will begin to price in a move at the August meeting.
Of course that is just my opinion...
Have a great week
Rob
Robert Rauf
(732)740-0175
RobertRaufHomeloans.com
it would probably be wise to lock in your loans based on this news.
It's OK! Lower interest will not help the housing market that much, right now. We need some help with the tight underwriting on credit.
There is pressure to raise the value of dollar now, as some large American companies are being targeted by their foriegn competitors.
James,
The economy is walking a tight rope between inflation and recession. Partially due to the weak dollar, Hugely because of the price of oil. no one thought the Fed would lower rates... the big fear in the market is if they will raise them in August or later in the year. Rates up would bring the value of the dollar back up but in turn would also hurt the companies that export overseas. The + side to the weak dollar is we have become an exporter again.
the issue now is one of Stag-Flation...