Wednesday, September 28, 2016

FED decided, it's not quite time to make a move just yet

Federal Reserve still waiting for right moment to raise rates.

Fed leaders decided against increasing the bank's key interest rate on Wednesday September 21st after the conclusion of a 2 day meeting. This was widely expected by economists and investors alike.

"Our decision does not reflect a lack of confidence in the economy," said Janet Yellen, chair of the Fed. "It's better to err on the side of caution."

The Fed also downgraded their forecast of economic growth in 2016 for the third time this year. This could be a positive as rates are likely stay low a bit longer, at least that's what we hope here at Rockland.

Some experts have supported the Fed's decision, arguing that the risks out weigh the pros. It would be much worse to raise rates too soon rather than too late.

"The better decision would be to wait," says William Poole, senior fellow at the Cato Institute. "We can make up ground if we have to in the future but if we raised rates prematurely and then we had to back down, that's going to more disruptive."

For the rest of the year, 10 out of 17 Fed members project only one rate hike this year.

The Fed last raised interest rates in December 2015, its first increase in nearly a decade. Currently, interest rates are in a range of 0.25% to 0.5%.

So as it goes, we are currently still in this market of incredibly low interest rates. Saving money by refinancing is in full swing. With a myriad of reasons such as refinancing to lower your term (15 year fixed), refinancing to get cash for reserves or other investing and obviously getting pre-approved for a purchase money loan, the time is now to inquire about what is possible and what makes the most sense for your financial situation. 

We are always available and will gladly answer any and all questions you might have. Contact us and join the many others who have worked with us and have been totally happy with their results.