The Federal Open Market Committee ( FOMC ) voted to leave the Fed Funds Rate within its target range of 0-0.25% for an extended period and also reiterated plans to support the mortgage market to the tune of $1.5 trillion.
The FOMC stated the economy is ”leveling off” and financial markets continue to improve.
The change in wording is the rosiest from the Fed since the start of the recession and it may signal the downturn’s end is near.
However, the Fed also mentioned lingering economic soft spots that could still impact a recovery through the end of 2009 and into 2010.
- Ongoing job losses
- Reduced “housing wealth”
- Tight credit conditions
Furthermore, rising energy costs remain a threat to inflation.
Market reaction to the Fed’s press release is muted. With no real change in message and a basic confirmation of what most investors already knew, Wall Street sees no reason to panic. Mortgage rates are unchanged.
Posted by Scott Fowler. Scott is a Partner and Sr Loan Officer with Horizon Financial. Scott can be reached toll free @ 877-627-9211 x 104 or email SFowler@HorizonFinancial.org . visit Scott’s website @ www.ScottFowlerTeam.com
