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Federal Reserve Meeting..

Posted by UtahCribs, Real Estate, Homes on January 28, 2010

28JAN
Posted by utahcribs as Uncategorized

Once again, our good friend Josh Mettle has given us some great insight.. Here is his breakdown of the Federal Reserve meeting from Jan. 27th.. I found it helpful.

A Simple Explanation Of The Federal Reserve Statement (January 27, 2010 Edition)

The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy “has continued to strengthen”, that the jobs markets is getting better, and that financial markets are supportive of growth.

There was no mention of the housing market’s strength. The last 3 statements from the Fed included that specific verbiage.

It’s the fifth straight statement in which the Fed spoke about the economy with optimism. This should signal to markets that 2008-2009 recession is over and that economic growth is returning to U.S. economy.

The economy isn’t without threats, however, and the Fed identified several in its press release, including:

Credit remains tight for consumers

Businesses are reluctant to hire new workers

Housing wealth is down

The message’s overall tone, however, remained positive and inflation appears is still within tolerance.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to wind down its $1.25 trillion commitment to the mortgage market by March 31, 2010. This is noteworthy because Fed insiders estimate that the bond-buying program suppressed mortgage rates by 1 percent through 2009.

Mortgage market reaction to the Fed press release is, in general, negative. Mortgage rates are rising this afternoon.

The FOMC’s next scheduled meeting is March 16, 2010.

via Josh Mettle Blog – Josh Mettle.

Spencer Janke
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fax 801-326-4763
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