On Wednesday, January 29th, the Federal Reserve unanimously voted to keep their benchmark federal funds rate unchanged. The rate will remain in the 2.25%-2.5% range after being increased by 25 basis points in December. The Federal Open Market Committee (FOMC), which determines the Fed’s rate policy, announced, “in light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”
Mortgage Rate Impact:
Mortgage rates have remained near its six-month lows recently, and keeping the federal funds rate unchanged should hold them near those levels. The Fed has, however, previously indicated that they intend to raise rates multiple times this year. Greg McBride, Chief Financial Analyst for Bankrate.com advised, “use this as an opportunity to keep paying down debt, refinancing into fixed rates, or grab low interest rate offers.”
Stock Market Impact:
In reaction to the announcement from the Fed, the Dow Jones Industrial Average reacted favorably and reached its high for the day.
Sources:
https://cnb.cx/2G3Ly7F
https://on.mktw.net/2Gg6W8W
https://cnb.cx/2HK5YUT
By: Jon Iacono