Industry NewsMortgage

Fed keeps lid on short-term rates

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The Federal Reserve will keep its target rate for the federal funds overnight rate at zero to 0.25 percent, and continues to expect that economic conditions are likely to warrant "exceptionally low levels of the federal funds rate for an extended period."The Federal Open Market Committee, in announcing the decision to keep the key short-term rate unchanged, said activity in the housing sector has increased over recent months. While household spending appears to be expanding, it remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.Businesses are still cutting back on fixed investment and staffing, the committee said, but at a slower pace, and they are making progress in bringing inventory into better alignment with sales.With "substantial resource slack" likely to continue to keep a lid on prices, and with longer-term inflation expectations stable, the committee expects inflation will "remain subdued for some ...