Led by Chairman Jerome Powell, The Federal Reserve decided it would not raise interest rates on Wednesday, August 1, 2018. The reason is that the economy and job market are remaining strong. The Fed also noted the low unemployment rate and that business investment and household spending have grown strongly according the the Wall Street Journal. Interest Rates are expected to be raised in September for the third time this year.
“Fed officials unanimously decided to maintain the target range for the federal funds rate set in June, at 1.75 percent to 2 percent.”
Despite this temporary good news for home buyers, most Federal Reserve officials still expect two more interest raise increases in 2018. The U.S. central bank has upgraded its economic outlook during this past year, due to a rise in global growth along with Congress’ approval on tax cuts and an increase in federal spending.
“Raising the benchmark federal funds rate prompts lenders to raise their rates as well, including mortgage rates, which would make home buying more expensive for consumers.”
The timing of this news comes as the house market is starting to cool down across some markets in the country. The next raise in interest rates could come as soon as September of this year.
Source: The Real Deal – Read Full Article
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