In view of realized and expected labor market conditions and inflation, the Federal Reserve did not vote to increase and decided to keep the target for its benchmark interest rate to a range of 1.75%-2%. They also mentioned, however, that further gradual rate increases are necessary as household spending has ‘grown strongly’ and job gains are also strong. Inflation remains little changed remaining near 2%.
At HFG we are often asked about the impact Federal Reserve meeting outcomes have on consumers. When expected decisions occur, the market typically does not respond with any swings or volatility. With the anticipated rate increases later this year, the Federal Reserve determines the US economy is going in the right direction. Increases in consumer spending mean that people have a positive attitude about their personal finances, as well as the short- and long-term stability of employment. However, you may still see a slight increase in your interest for consumer loans like credit cards, since those are usually tied to the Fed’s decisions.
Looking at the impact on mortgage rates specifically, these increases are generally forecast months in advance, but the market still does react at times. With any market news, understanding the importance of locking your rate is critical. When the rate is locked, you are protected against market shifts during the rate lock period (which in most cases can range from 15 to 90 days). The decision to lock a rate is always the up to the client, and we believe Homeowners Financial Group has the experience to provide expert guidance navigating in any market environment.
Please contact a Licensed Mortgage Professional near you with any questions. We look forward to working with you soon!