May 3 2018 52086 1

Dated: 05/03/2018

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Interest Rate Unchanged For Now!  Thursday May 3, 2018


The Federal Reserve has said it will not raise rates at it's Wednesday's Meeting... It is keeping it's Benchmark interest rate unchanged, despite rising inflation.  Mortgage Rates are not directly ties to the Fed's benchmark rate, but they are of course influenced by them. 

The Federal Open Markets Committee, which had raised rates for the first time in 2008 had its last meeting in March when they increased the Federal Funds rate by 25 basis points, has not raised rates at this meeting. 

At May's meeting, the FOMC voted to keep rates the same and maintain the target range at 1.5% to 1.75%. 

"Information received since the FOMC met in March indicates that the labor market has continued to strengthen and the economic activity has been rising at a moderate rate," the committee noted in a statement. "Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.". Inflation has risen to nearly 2%. 

The FOMC also indicated that it expects that it will gradually raise interest rates at a later time, but that they will likely remain at historically low levels "for some time". 

"The committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the Federal Funds rate; the Federal Funds rate, is likely to remain, for some time, below levels that are expected to prevail in the longer run," the committee stated. "However, the actual path of the Federal Funds rate will depend on the economic outlook as informed by incoming data." 

Source: "FOMC Keeps Rate Hike off the Table at May Meeting," HousongEire (May 2, 2018)

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Michael G Boyle

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