San Francisco Real Estate - Residential

Steady Fed still sees inflation risks... but rates remain unchanged - Good news for home loans

The Fed met Tuesday and decided to hold rate increases again. Though they are itching to raise rates, inflation is just over the 2% mark they are aiming for but not enough to cause that big of a concern. Therefore, they held overnight rates to 5.25% for the fourth straight meeting. What does this mean to us? For one, those second mortgages and lines of credit on our homes will probably not go up.

MarketWatch reports, "...In its last meeting of the year, the Federal Open Market Committee maintained its wait-and-see approach. 'This statement suggests a wait-and-see approach on the part of the Fed as the downturn in housing plays out,' said economists at Lehman Brothers in a research note. Fed Chairman Ben Bernanke and his colleagues continued their practice of making subtle changes to past policy statements. The subtle changes to the statement from October are dovish in that they increase the central bank's concern about the economic outlook.
But the key statement was unchanged. "Some inflation risks remain," the committee said. Read the full statement. ..." Read the rest of the article.

- Mick Orton

posted by SFResidence.com @ 7:33 AM