No Surprises From the Fed

Wednesday’s Fed Meeting concluded without much fanfare in the market. The Fed Funds rate was not changed and Prime Rate remains at 3.25%. The main details of the Fed policy statement suggested that the downturn in the economy is slowing and deflation is no longer a big threat. The Treasury and Mortgage Backed Security Purchase Program will remain the same as well. The Fed meeting was basically a non-event for the market as nothing really changed.

Thursday was an impressive day in the Bond Market, as yields were pushed higher on positive Treasury Auction results. It was just a few weeks ago that rates soared on an oversupply of Treasuries and poor investor participation in auctions. The auction results were a much needed sigh of relief for mortgage rates.

In Friday’s news, it was announced that the personal savings rate for Americans has soared to 6.9%. This is the highest level since December of 1993. A high savings rate can be a double edged sword for the economy. While it is good to see people saving, spending is the lifeblood of a strong economy.

We’ve seen a nice drop in mortgage rates since the peak a few weeks ago at 5.625% on the 30 year fixed. Currently, the 30 year fixed is 5.125%. We don’t know how long this dip in rates will last, so take action now on your purchase or refinance!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com