Posts Tagged ‘FOMC,Fed Minutes’

Fed Minutes Hint At New Economic Stimulus

Wednesday, July 13th, 2011

FOMC Minutes June 2011The Fed­eral Reserve released its June 2011 Fed­eral Open Mar­ket Com­mit­tee meet­ing min­utes Tues­day. It con­tained no sur­prises and, as such, mort­gage rates have idled in the hours since.

The Fed Min­utes is pub­lished 8 times annu­ally, three weeks after each sched­uled Fed­eral Open Mar­ket Com­mit­tee meet­ing. It’s the offi­cial log of the meeting’s con­ver­sa­tions and debates.

The Fed Min­utes is the length­ier com­pan­ion piece to the FOMC’s more well-known, post-meeting press release. As com­pared to the brief-and-focused press release,by com­par­i­son, the Fed Min­utes are long and detailed.

June’s press release was 458 words long. Its min­utes totaled 6,889 words.

The June min­utes reveal some inter­est­ing per­spec­tives from within the Fed­eral Reserve, too.

  • On growth : Eco­nomic recov­ery had been slower than the com­mit­tee expected
  • On hous­ing : The mar­ket remains depressed. Fore­clo­sures are “hold­ing back” construction.
  • On rates : The Fed Funds Rate should remain low for an “extended” period

In addi­tion, the Fed­eral Reserve dis­cussed whether a new round of eco­nomic stim­u­lus was nec­es­sary. Com­mit­tee mem­bers agreed that a poor out­look for employ­ment in the medium-term would make this move more likely.

There was lit­tle that sur­prised Wall Street in the June Fed Min­utes. This is why mar­ket reac­tion has been muted since its release.

The FOMC meets next August 9. If jobs data con­tin­ues to weaken between now and then, expect the stim­u­lus chat­ter to con­tinue. It’s unclear, how­ever, how this would impact mort­gage rates.

For now, mort­gage rates remain near their all-time lows, and they have much more room to rise than to fall. If you’re shop­ping for a loan, there­fore, the tim­ing is right for a lock.

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August’s Fed Minutes Lead Mortgage Rates Higher

Thursday, September 2nd, 2010

FOMC August 2010 MinutesHome afford­abil­ity took a slight hit this week after the Fed­eral Reserve’s release of its August 10 meet­ing min­utes.

The “Fed Min­utes” is a lengthy, detailed recap of a Fed­eral Open Mar­ket Com­mit­tee meet­ing, not unlike the min­utes pub­lished after a cor­po­rate con­fer­ence, or condo asso­ci­a­tion gath­er­ing. The Fed­eral Reserve pub­lishes its meet­ing min­utes 3 weeks after a FOMC get-together.

The min­utes are lengthy, too.

At 6,181 words, August’s Fed Min­utes is thick with data about the econ­omy, its cur­rent threats, and its deeper strengths. The min­utes also recount the con­ver­sa­tions that, ulti­mately, shape our nation’s mon­e­tary policy.

It’s for this rea­son that mort­gage rates are ris­ing. Wall Street didn’t see much from the Fed that war­ranted otherwise.

Among the Fed’s obser­va­tions from its minutes:

  • On the econ­omy : The reces­sion was deeper than pre­vi­ously believed
  • On jobs : Pri­vate employ­ment is expand­ing slowly
  • On hous­ing : The mar­ket was “quite soft” in June

Now, none of this was con­sid­ered “news”, per se. If any­thing, investors were expect­ing for harsher words from the Fed; a bleaker out­look for the econ­omy. And, because they didn’t get it, monies moved to stocks and mort­gage bonds lost.

That caused mort­gage rates to rise.

The Fed meets 8 times annu­ally. Its next meet­ing is sched­uled for Sep­tem­ber 21, 2010.  Until then, mort­gage rates should remain low and home afford­abil­ity should remain high. There will be ups-and-downs from day-to-day, but over­all, the mar­ket is favorable.

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