Posts Tagged ‘Federal Open Market Committee’

Explaining what the Federal Reserve did in plain English: March 18, 2009

March 18th, 2009

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today, within the target range of 0.000-0.250 percent.  This doesn’t mean the Fed stood pat, however.  On plan to resurrect the economy using “all available tools”, today, the Fed announced a new, $1.5 trillion round of fiscal support for the treasury and mortgage markets.  The stimulus will likely be Thursday morning’s headline story.

In its press release, the FOMC touched upon a few of the prevailing economic issues, using these points as a legitimizing backdrop for its newest debt load:

  • Job losses and wealth loss are dragging down consumer spending
  • Some U.S. trading partners are falling into recession
  • Businesses are cutting back on investment and inventory

Of interest is that the FOMC said today’s inflation levels may be too low to support economic growth at all.  This condition is more commonly called deflation.  The Fed’s latest actions, therefore, may be a deliberate attempt to induce inflation through unprecedented borrowing…

To read the rest of my mortgage industry blog, visit:

http://www.loanapproval411.com/info_01/page_1.rad

 

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-474-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

  • Share/Bookmark

The Federal Reserve is meeting and what it means to your mortgage rate.

March 17th, 2009

The Federal Open Market Committee begins a scheduled, 2-day meeting today to discuss the country’s monetary policy.  As is custom, the group will issue a press release to the markets upon adjournment.  There are 8 scheduled FOMC get-togethers annually and the post-meeting press releases are among the most powerful market-moving events of the year.  It’s not the Fed’s actual policy changes that causes fortunes to be won or lost, though.  These changes can predicted and traded — and, therefore, hedged — on Wall Street using Fed Funds Rate Futures.  For example, Wall Street predicts with 97% certainty that the Federal Reserve will not make a policy change at this time.  As opposed to the policy change, it’s the verbiage of the FOMC’s press release that can really move markets.  This is because the press release is a clear-eyed look into what the Federal Reserve thinks of the United States economy — its strengths, its weaknesses, and its threats…

To read the rest of my mortgage industry blog, visit:

http://www.loanapproval411.com/info_01/page_1.rad

 

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

  • Share/Bookmark