Current Mortgage Rates: Investors Getting Motion-Sickness from Constant Ups and Downs

Posted by  on Sep 04, 2009

What Did The FOMC Say about Interest Rates?

The August 12, 2009 press release by the Federal Open Market Committee (FOMC) raised some concern for the future of mortgage rates. The Federal Reserve has been under constant pressure to control its balance sheet and avoid run away inflation. This means that at the very first sign of inflation, the FOMC will very likely begin a course of rate increases to try to stay in front of the dreaded inflation dragon.

For now, the Feds have issued a statement saying that their target rate will remain unchanged and they will continue to buy mortgage backed securities (MBS) but only until October, ending at a total of $300 billion. This is immediately a positive for mortgage loans that are adjusting along with the Prime Rate, such as a home equity loan.

The Outlook On Inflation

As of August 18, 2009, the outlook for inflation controls do not appear to be urgent. The Producers Price Index was down .9% which was very surprising to analysts. This leading indicator's decline should mean that prices to consumers will be relaxed lower or at least not increase. This is excellent news for the consumer. It also means that inflation is not on the march just yet.

The Feds will continue to watch for signs of inflation as the economy re stabilizes. But at least for the present moment, mortgage interest rates should remain low. For the most current mortgage rates, follow this link.


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