In a unanimous vote today, the Federal Reserve decided to maintain the federal funds target range of 1.50% – 1.75%. The Fed suggested it will leave rates unchanged through the end of 2020. After the vote, Chairman Jerome Powell said that he would need to see a sustained increase in inflation before considering a raise in the target range.
Looking ahead, the Fed’s dot-plot of interest rate forecasts by officials showed no changes next year and only one hike in 2021. Only four of 17 officials think rates might rise next year. The Fed’s short term economic view is fairly positive, despite some investors believing that additional rate cuts may be necessary in 2020 due to economic concerns.
While some investors are still uneasy, Jan Hatzius, chief economist at Goldman Sachs, said the Fed’s three rate cuts deserve a lot of credit. The Fed’s dramatic shift from planning at the start of 2019 to hike rates to eventually cutting three times has eased financial conditions and bolstered the outlook for the economy.
Rates remain incredibly favorable for borrowers, and everyone should consider taking advantage. Favorable rates means homebuyers can qualify more easily with more purchasing power, or refinance their mortgages into a lower rate. Contact an HFG Licensed Mortgage Professional near you if you’d like to learn more.