Mortgage Rates Dip This Week, But Look For Increase Next Week

Mortgage rates dipped this week according to Freddie Mac’s Weekly Survey. The survey showed 30 year fixed-rates down 5 basis points on the week to 4.32%. The 15 year fixed-rate was down 6 basis points to 3.32%.

Ten Year Treasury Rate yields were at 2.78% this afternoon. They are up 12 basis points since last Thursday with volatile upward trading yesterday in response to yesterday’s FOMC statement and Janet Yellen’s press conference. See our Daily Interest Rate Updates for the most current bond rates.


Note: Chart above is dynamic and reflects current survey, updated weekly.

For TODAYS’s Mortgage Rates, see below or find more home lenders at http://moneycafe.com/personal-finance/mortgage-rates/.

David Stockman’s Contrarian View Of Fed & QE

David Stockman was on CNBC today to offer his view of Federal Reserve Policy and the years of Quantitive Easing. We think he nails it and his warning should be heeded or at least hedged against in the near future. Only time will tell.

Fed Continues Tapering – Fed Funds Rate Unchanged

The Federal Reserve will continue tapering purchases of government and mortgage bonds. They intend to purchase $30 billion in government bonds per month (down from $45 billion before tapering began) and $25 billion per month in mortgage bonds (down from $40 billion before tapering began.) The Fed Funds Rate remains the same with a target range of 0.00% to 0.25%.

See FOMC statement below.

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Press Release

Release Date: March 19, 2014

For immediate release
Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually, moving toward those the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement […]

Fed Continues Tapering – Fed Funds Rate Unchanged

The Federal Reserve will continue tapering purchases of government and mortgage bonds. They intend to purchase $35 billion in government bonds per month (down from $45 billion before tapering began) and $30 billion per month in mortgage bonds (down from $40 billion before tapering began.) The Fed Funds Rate remains the same with a target range of 0.00% to 0.25%.

See FOMC statement below.

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Release Date: January 29, 2014

For immediate release
Information received since the Federal Open Market Committee met in December indicates that growth in economic activity picked up in recent quarters. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate declined but remains elevated. Household spending and business fixed investment advanced more quickly in recent months, while the recovery in the housing sector slowed somewhat. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

Taking into account the extent of federal fiscal retrenchment since the inception of its current asset purchase program, the Committee continues […]

Prime Rate Should Hold Steady For A While

The Federal Reserve indicated yesterday that it will hold the Fed Funds Rate at its current target of zero to 1/4 percent long after the unemployment rate comes down. This signals that the low Fed Funds Rate will be one of the last easing levers the Fed will maintain. Because of this, and the fact that banks price the Prime Rate on the Fed Funds Rate, the Prime Rate will likely stay low for the foreseeable future.

The big caveat to the Fed’s intention is inflation. If inflation takes hold and is unable to be contained, the Fed Funds Rate may become the primary lever to fight inflation. In that case, all bets are off and they may be forced to raise rates.