The Federal Reserve’s Open Market Committee voted this week to not increase the federal funds rate, which should help keep mortgage rates low during the busy spring home buying season.
The federal funds rate will hold at its current 0.25 percent and 0.5 percent rates, at least for now. The FOMC next meets in June to decide again whether to increase rates at that time.
Read more: Fed Tightening Sparks a Yawn
The FOMC noted that the labor market has “improved further” but economic activity growth has slowed.
“A range of recent indicators, including strong job gains, points to additional strengthening of the labor market,” the FOMC said in its official statement. “Inflation has continued to run below the Committee's 2% longer-run objective, partly reflecting earlier declines in energy prices and falling prices of non-energy imports.”
The committee went on to note that it expects “economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”
Source: “As Expected, Fed Holds Off Interest-Rate Hike,” HousingWire