The Federal Reserve met last week and as expected, did not raise interest rates – however……they did indicate that they are still planning on 4 rate increases in 2018. What does that mean for you?
At this point, most investors expect the Fed to raise rates at their September meeting, probably another .25%. The Fed wants to keep inflation around 2%. They will watch the economy for signs of change. Expect interest rates to continue to increase as they have been the past few months.
The Fed feels that job gains have been strong in recent months, the unemployment rate has stayed low. Household income has grown. The overall inflation rate (other than food and energy) has remained around 2% – their goal. The indicators of longer term inflation have not changed.
The Fed did give itself an opening that if the economy changes for the worse, they may change their mind. The Fed will watch to see if employment stalls, the housing market has problems or if there is some other issue with the economy. If there is, they may not increase rates as they currently plan to.
For those thinking about buying a home or refinancing, you may want to do something sooner than later. We know interest rates will increase over time. I do hear people complain about interest rates but we need to remember that interest rates used to much higher than they are now! We are all spoiled!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
