First Time Home Buyers
The first of eight scheduled Federal Open Market Committee meetings ends today.
Current forecasts are for no changes to the Fed Funds Rate. We are watching the policy statement. We’ll post an update after the meeting adjourns when we see how it will impact mortgage rates.
The post-meeting statements are brief, but highly influential. Wall Street parses every word, every sentence, and every phrase. The reason that the markets tend to be jittery on Fed days is that the traders typically rebalance all of their bets to get an investment edge over other traders.
Fed optimism tends to send stocks soaring at the expense of bonds. When bonds sell-off, mortgage rates go higher. If the Fed mentions lingering economic concerns, stocks can lose and bonds typically win. This pushes interest rates lower.
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