Federal Reserve, FOMC, Market Insight

Fed Minutes Show Caution on Inflation and European Spillover

February 24, 2012 by · Leave a Comment 

FOMC Minutes January 24-25 2012The Federal Reserve has released the minutes from its 2-day meeting on January 24-25, 2012.

The Fed Minutes is a summary of the conversations and debates that shape our nation’s monetary policy. It receives less attention than the Fed’s more well-known, post-meeting press release, but the Fed Minutes is every bit as important.

To rate shoppers in Schererville Indiana, for example, the Fed Minutes can provide clues about whether mortgage rates will generally rise or fall in the coming months.

Click here to see today’s mortgage rates.

The most recent Fed Minutes reveals a central bank divided on the future of the U.S. economy. The minutes show some Fed members in favor of new, immediate market stimulus. It shows others in favor of terminating the stimulus that’s already in place.

The Fed’s debate centered on the topic of inflation, and the pressures that a prolonged, near-zero Fed Funds Rate can place on the economy. Ultimately, the Fed did nothing, neither adding new stimulus nor removing that which is already in place.

It did, however, communicate a plan to keep the benchmark Fed Funds Rate rate “exceptionally low” through late-2014, at least.

Click here to see today’s mortgage rates.

The Fed Minutes included the following notes, too :

  • On employment – Unemployment rates will “decline only gradually” in 2012
  • On housing – The market is “held down” by the “large overhang” of distressed homes
  • On inflation – Consumer prices have remained “flat”

Furthermore, the Fed expressed optimism regarding European financial markets, noting that market sentiment “appeared to brighten a bit”. Nonetheless, “spillovers” remain possible and the threat continues to weigh on markets. 

Mortgage rates are slightly worse since the Fed Minutes were released.

Click here to see today’s mortgage rates.

The Federal Reserve’s next scheduled meeting is March 13, 2012 – its 2nd of 8 scheduled meetings this year.

Related Posts Plugin for WordPress, Blogger...
Be Sociable, Share!

James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

More Posts - Website

Follow Me:
TwitterFacebookLinkedInPinterest

  • What Is Your Home Worth in Northwest Indiana and the suburbs of Chicago Illinois?

Speak Your Mind

WelcomeHomeNWI.com