Fed Chairman Ben Bernanke and the Federal Reserve Board of Governors concludes a two day meeting today with their announcement of interest rate policy change around 1:15 Chicago Time. Two things about the announcement you should know. First, has been and will be plenty of time spent and questions asked about the impact of what is announced, how it’s announced and what it will mean for the economy in general and to interest rates for the Chicago homeowner in both the long and the short run. Second, once the announcement is made, none of that will matter much. So here is a brief primer on what you need to know before the announcement.
The recession is over. Well actually, better yet, keep in mind that the administration and the media declared us “on the road to recovery” to paraphrase the tone after last week’s monthly jobs report. This positioning though means that the Fed is unlikely to raise interest rates today because as a practical matter they don’t want to jeopardize the stock market rally or the actual recovery process. “Less bad” does not equal a recovery and they don’t want stop it before it really gets started. In addition to the announcement about rates, the Fed will also issue a statement, much like a press release, that will also be watched.
Finally, keep in mind that mortgage rates are impacted by many factors, and change daily. So though the Fed meeting is really important and worth watching, the news we get today is likely to become background noise in a week or so. It is worth knowing and getting your arms around here soon, especially if you are a first time home buyer. There are many things to consider when buying your home and when to lock into an interest rate is one of them. So there will be a detailed explanation of the Fed’s move, policy statement (the press release) and what they mean going forward once the policy statement is made.
