Industry News

Fed raises target rate to 2.5%

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The Federal Reserve's Open Market Committee today continued its course of raising the target for the federal funds rate by .25 percent, bringing it to 2.5 percent.   The move is the sixth hike since last summer, beginning with a 25 basis point hike at the end of June, which was the first time the Fed had raised the rate in four years. The Fed appears poised for more rate hikes until it reaches what it considers a neutral monetary policy.   Rates on long-term mortgages so far have not followed suit. Most economists, however, predict a gradual rise in rates over the course of the year. Rates on 30-year fixed-rate mortgages increased slightly to 5.61 percent in the Mortgage Bankers Association's weekly survey released today. Rates on 15-year fixed-rate mortgages increased to 5.1 percent.   The Committee in its statement said it believes "even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, ...