Mortgage Rates January 28, 2009 FOMC Issue

“The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.” (FOMC PR)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today.  It remains within a target range of 0.000-0.250 percent. Not that BIG of a Surprise!

Read the press release parsing WSJ does a great job.

After the announcement Mortgage Rates moved higher due to the selloff in MBS (FNMA 30 YR 4.0%).  The selloff should be temporary, given the FEDs stance on purchasing MBS.  Mortgage Backed Securities gave up -19bp, pushing rates higher See Real Time Mortgage Rates.

Carbon Copy meeting; in its press release, the FOMC reiterated most of the key points from its December 2008 statement, including:

• The U.S. employment outlook continues to deteriorate
• Consumers and businesses continue to cut spending
• The housing sector is still showing weakness

New Items Highlighted included:

• Credit markets have credit available and need to increase credit activity
• Referenced the fear of Deflation
• Confirmed they will increase Treasury purchase activity

Look for Mortgage Rates to come back down, the higher rates are temorary and should not hang this high for much longer.

[where: 85029]
[where: 98109]

No related posts.