Home >> Daily Dose >> Interest Rates Stay Put After Fed Meeting
Print This Post Print This Post

Interest Rates Stay Put After Fed Meeting

rates-bhDespite rising “consumer sentiment” and confidence in the markets, the Federal Reserve announced Wednesday no new interest rate hikes at the Wednesday meeting of the Federal Open Market Committee(FOMC).

The FOMC kept the current benchmark overnight lending rate target at a range of 0.5 percent to 0.75 percent. The Fed raised the target a quarter of a point in December 2016, only the second hike in the past ten years.

Per a statement released on the Fed’s website, the Committee attributed the steady interest rates to a generally improving economy.

“Information received since the FOMC met in December indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace,” the Committee said. “Job gains remained solid and the unemployment rate stayed near its recent low. Household spending has continued to rise moderately while business fixed investment has remained soft. Measures of consumer and business sentiment have improved of late.”

Federal Reserve Chair Janet Yellen said recently that as the economy nears full employment, the Fed mustn’t be too slow with rate hikes.

"Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road - either too much inflation, financial instability, or both," Yellen said in remarks prepared for delivery to the Commonwealth Club of California in San Francisco. “"In that scenario, we could be forced to raise interest rates rapidly, which in turn could push the economy into a new recession," she said.

The Fed went on to say they plan on supporting the growing job market.

“The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation,” they said.

The Fed indicated in December 2016, following the aforementioned rate hike, that three additional hikes are on the way this year.

Danielle Hale, Managing Director of Housing Research with the National Association of Realtors, said today’s announcement was in line with their expectations.

“We weren’t anticipating a change of rates today, but we anticipate they’ll be raising funds in the future,” Hale said. “We think mortgage rates will continue to move up gradually with that policy of normalization.”

About Author: Phil Banker

Phil Banker began his career in journalism after graduating from the University of North Texas. He has covered a number of communities across Texas and southern Oklahoma, writing news and sports for publications including the Ardmoreite, Ennis Daily News and the Plano Star-Courier. He is currently a staff writer for the MReport.
x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.