September 20, 2022
For more than the past month, the members of the Federal Reserve Board have been talking tough against inflation. This talk has caused long-term rates to rise in anticipation of Fed activity in the coming months. Statements such as “raising rates and keeping them high as long as it takes until inflation is under control” have caused plenty of consternation in the markets.
But the time for talking is over. Now the Fed needs to take action to back up their statements. And like the previous meetings, the only question is how much they will raise short-term rates. Most bets were on a half-percent increase before the tough talk commenced. Predictions subsequently moved to three-quarters of one percent in the wake of this talk. We also had plenty of economic reports to chew on in the meantime, including employment and inflation data.
Not to worry, though. The Fed will have plenty to say with their announcement after the meeting adjourns tomorrow. And since an increase is a fait accompli, the analysts will be combing the statements for hints regarding where the Fed heads from here. Before the tough talk, many thought that this month would be the last of the big increases. Now everything is on the table. Plus, the next meeting is right before the mid-term elections — and in the past, the Fed has been reticent to take major actions as voters are going to the polls.
Source: Origination Pro
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