Federal Reserve Statement (October 24 , 2012) QE Infinity

Putting the FOMC statement in plain EnglishThe Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday.

Fed Funds Remains Unchanged

For the ninth consecutive meeting, the vote was nearly unanimous. And, also for the ninth consecutive meeting, Richmond Federal Reserve President Jeffrey Lacker was the lone dissenter in the 9-1 vote.

The Fed Funds Rate has been near zero percent since December 2008.

In its press release, the Federal Reserve noted that, since its last meeting six weeks ago, the U.S. economy has been expanding “at a moderate pace”, led by growth in household spending. However, “strains in global financial markets” continue to remain threat to U.S. economic growth, a comment which references to the Eurozone and its economy.

The Fed’s statement also included the following economic observations :

  1. Growth in employment has been slow; unemployment is elevated
  2. Inflation pressures remains stable, and below 2%
  3. Business spending on equipment and structures has slowed

In addition, the Fed addressed the housing market, stating that there have been “further signs” of improvement, “albeit from a depressed level”.

Finally, the Federal Reserve re-affirmed its commitment to its most recent stimulus program, a bond-buying program known as QE3.

QE Infinity

Via QE3, the Federal Reserve has been purchasing $40 billion in mortgage-backed bonds monthly, with no defined “end date”. QE3 or “QE Infinity” now is meant to suppress U.S. mortgage rates.

Fed Chairman Ben Bernanke has said that QE3 will remain in place until the U.S. economy has recovered in full, at least. It’s a plan that may help home buyers in Pleasanton and  California. Since QE3 launched, mortgage rates have moved to new all-time lows.

The Fed also used its meeting to announce that it intends to hold the Fed Funds Rate near its target range of 0.000-0.250 percent until mid-2015, at least.

The FOMC’s next scheduled meeting is a two-day event and its last of the year, December 11-12, 2012.

I’m Here to Help You Take Advantage of Low FED Funds Interest Rates

I love to work with my Bay Area readers that find my information on the Mortgage and Housing Market helpful in your decision making process. As a Mortgage Planner at Vintage Mortgage Group in Pleasanton, I am in a unique position to help you capitalize on historically low interest rates in 2012. Contact me below today to help you with your purchase or refinance.

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