Federal Reserve, FOMC, Mortgage Rates

Fed Minutes Shock Investors – Mortgage Rates Rise Suddenly

April 4, 2012 by · 1 Comment 

FOMC Minutes March 2012The Federal Reserve has released the minutes from its last FOMC meeting held March 13, 2012. Mortgage rates in Northwest Indiana and suburbs of Chicago Illinois are rising on the news.

The Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes generally 3 weeks after their meeting.

Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.

Click here to see today’s mortgage rates.

The Fed Minutes is a lengthy publication, often filling 10 pages or more. By contrast, the more well-known publication of the FOMC press release tends to span 6 paragraphs or less.

The extra detail contained within the Fed Minutes fuels Wall Street, especially given the current economic uncertainty. Investors look to the Federal Reserve for clues about what’s next for the U.S. economy.

Lately, the minutes has made an out-sized impact on mortgage rates. The Fed’s words continue to swing the mortgage-backed bond market.

Click here to see today’s mortgage rates.

Yesterday and today is no different.

March’s Fed Minutes is a dense one and markets are reacting. The text shows a central bank softly divided on future U.S. economic policy, and in debate about whether existing market stimulus should be removed.

The Fed has said that it’s expecting high levels of unemployment and low levels of inflation in the coming months, an outlook that leaves little reason to introduce a third round of stimulus. This is the primary reason why mortgage rates increased suddenly in Northwest Indiana and suburbs of Chicago Illinoi on the heals of the Fed Minutes’ release yesterday afternoon at 1 PM, CST.

Click here to see today’s mortgage rates.

Since mid-March, mortgage rates dropped on speculation that the Federal Reserve would introduce a mortgage bond purchase program this quarter. Today, those expectations have reversed.

According to the minutes, the Federal Reserve believes that additional market stimulus would only be necessary “if the economy lost momentum”, or if inflation remained too far below 2 percent per year. Currently, Core PCE — the Fed’s preferred gauge of inflation — is running slightly below 2 percent.

The Federal Reserve’s next scheduled meeting is April 24-25, 2012 — it will be the third of 8 scheduled meetings this year. In the mean time, there will be several Fed Bank Presidents making public statements.

Click here to see today’s mortgage rates.

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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!

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  1. […] James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, qualified liability advisor 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!Source: welcomehomenwi.com […]



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