It’s Fed Day! I Hope These Fed Presidents Know What They are Doing…

Filed under: Market Comentary

Anyone in the mortgage or real estate business needs to be paying attention to what is happening in the Fed meeting and the announcement. Today was day 2 of the meeting, where they always make an announcement at 11 am PST. I purposefully waited to record this video so I could share the information about the latest announcement.

Today, they announced that they are going to continue buying mortgage-backed securities and treasuries at the same rate they’ve been doing. So, no tapering this month.

What it Means: Short-Term and Long-Term

This is good news in the near-term for interest rates. But the bigger concern is that they will have to come off the throttle at some point. They need to watch for two things: employment and inflation.

Employment is wonky, but there is nothing they can do about that. Inflation is running nearly double what they are aiming for – usually it’s around 2% and it’s currently over 4% right now.

Time Will Tell

There’s a lot going on. I hope they know what they are doing. Time will tell, especially since we are facing many unusual variables as we continue dealing with COVID and working through supply chain issues.

The economy isn’t on rock-solid footing yet, but it seems like tapering out of this Fed strategy seems like it will be a good idea starting sometime soon.

They are talking about potentially making changes at the meetings happening in either November or December. It’s common for them to drop only small bits of data out so it doesn’t shock the system.

For now, it’s good news since mortgage rates are staying steady. Personally, I’m a little worried to see what will happen over the next 6 – 12 months.

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