Mortgage rates fell moderately today, largely in response to the Federal Reserve's policy announcement.
Federal Reserve Chairman Jerome Powell issued his strongest statement yet Wednesday that the central bank has changed its outlook regarding interest rate hikes.
“The case for raising rates has weakened somewhat,” Powell said during a news conference following this week’s two-day Federal Open Market Committee meeting.
The Fed is in charge of seeing a key short-term rate that impacts the entire financial market by varying degrees. The Fed does not set fixed mortgage rates, but in general, the friendlier the Fed with its monetary policy, the better it is for the entire spectrum of rates.
The Fed was dovish today. This came as unexpected news to investors who were already planning on some sort of adjustment in the verbiage promising ongoing rate hikes and decreases in the amount of bonds purchased directly by the Fed. For all intents and purposes, today's announcement and press conference could be interpreted as the Fed saying it's done hiking rates until further notice and would only resume hiking if economic data at home and abroad justifies it.
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