The Federal Reserve meets today to conclude its current two day meeting. As always they will issue a statement on interest rates. This will give us some direction on the economy and hopefully will tell us where rates will be going from here.
Expect the Fed to leave rates unchanged. Remember that the Fed Funds Rate, which they control, has been at .25% for quite awhile. This leaves little room to cut since they are “bumping up” on zero percent. Remember that this is the rate that banks will borrow reserves from each other at. There will be no mortgage rates at .25% at any time soon.
If the Fed speaks of a strongly improving economy, rates will likely rise this afternoon. If they speak of a treacherous time for the economy mortgage rates will stay about the same. However if they discuss major challenges on the horizon for the economy, rates will likely move down. This is unlikely but we will keep you posted once the announcement is made shortly after 1PM.
