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The Federal Reserve’s Federal Open Market Committee considered easing monetary accommodations implemented in response to stronger economic conditions.
The Fed started making trillions in monthly bond purchases when the pandemic started and said it will continue to purchase bonds until the economy makes “substantial progress” toward its legally mandated goals of achieving two percent inflation and maximum employment. Supply shortages and high demand for goods caused by the pandemic have impacted the overall economy, but labor markets have suffered disproportionately.
Pandemic-driven quits and retirements have left many job openings that remain unfilled. Service-related jobs in hospitality and travel have been especially hard-hit as consumers continued to stay home.
Federal Reserve policymakers continued to call current higher-than-expected inflation “transitory,” but did not explain how long high inflation is expected to last.
Supply-chain logjams continued to negatively impact supply and demand for goods and services; in some cases, high demand and short supplies drove inflation higher: “Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors.”
Fed Chair Jerome Powell commented on high inflation during a press conference given after the FOMC post-meeting statement: “Our baseline expectation is that supply chain bottlenecks and shortages will persist well into next year and elevated inflation as well.” Chair Powell continued: “As the pandemic eases, supply chain issues will abate and growth will move up. As that happens, inflation will decline from today’s elevated levels.”
The Fed just approved a 0.25 percentage point rate increase, the first since December 2018. The central bank slo indicated rate increases coming at each of the next 6 meetings this year.
That said, mortgage interest rates also continue to be relatively low. This, as well as the improvement of the economy, is prompting the housing market across the nation to bounce back as buyers come out of the woodworks and take advantage of low interest rates. Right now, the rate for a 30-year fixed-rate mortgage is 3.85%.
Now may be a very good time to take advantage of still historically low mortgage interest rates before they rise. If you have specific questions on purchasing or refinancing your home mortgage loan and how these changes may affect you, please contact your trusted mortgage professional today.
Do you have questions about mortgages? Are you considering applying for one soon? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado and have been in the business since 1992. Our experts are on stand-by ready to work with you to help you choose which one of our mortgage programs is best for you. Contact us today with any questions you have about mortgages.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.