Federal Reserve Meeting

[Adam in CO]

The Federal Reserve left = interest rates unchanged Wednesday for the fifth straight time.
Following is the text of the statement from the central bank's policy-making = Federal Open Market Committee: The Federal Open Market Committee decided today = to keep its target for the federal funds rate at 5-1/4 percent.
The central bank left its target for the federal funds rate, an overnight bank = lending rate that affects rates on various types of loans, at 5.25 percent. It = was the fifth straight time the Fed has held steady, a move that was widely = expected on Wall Street
Energy prices have fallen in recent months, leading some economists to think = that inflation is no longer as big of a concern for Fed Chairman Ben Bernanke = and other policy-makers. There also have been some signs the housing market is = stabilizing, which could mean the economy won't slow as much in 2007 as some = had initially feared.
In fact, the Fed's decision came just a few hours after the government reported = that economic growth in the fourth quarter was higher than expected and that = inflation pressures had eased.
The Fed indicated as much in its closely watched statement Wednesday.
"Recent indicators have suggested somewhat firmer economic growth, and = some tentative signs of stabilization have appeared in the housing = market," the Fed said, adding that the economy "seems likely to = expand at a moderate pace over coming quarters."
The Fed also said that "readings on core inflation have improved modestly = in recent months," and that "inflation pressures seem likely to = moderate over time."
With that in mind, there is a growing sense on Wall Street that the Fed may = leave the fed funds rate at 5.25 percent for the next few months, and possibly = all year.
Investors cheered the news. Stocks, which were mixed prior to the announcement, = [COLOR=3D"#0000FF"']headed higher[/color][FONT='Times"] following the Fed's = decision.
[/font][COLOR=3D"#0000FF"']Bonds[/color] also rallied, pushing the yield on the benchmark = 10-year Treasury note down to 4.84 percent from 4.88 percent late Wednesday. = Bond prices and yields move in opposite directions.
"We've substituted more growth with less inflation and that's a good news = event for the financial markets," said Michael Strauss, chief economist = with Commonfund, a money management firm based in Wilton, Conn. "The Fed = recognized that the inflation situation is getting a little better."
The vote for no change in interest rates was unanimous for the first time since = the Fed first paused in August after raising rates seventeen straight times = from June 2004 through June of last year.
But investors shouldn't read too much into the unanimous vote since Richmond = Federal Reserve president Jeffrey Lacker, who had voted for a rate hike at the = past four meetings, is not a voting member of the Fed's policy committee this = year.
Nonetheless, one bond fund manager said one reason the market greeted the Fed's = statement so enthusiastically Wednesday is because it does appear that the = central bank has less reason to be as worried about inflation going forward. In = other words, fears of more rate hikes from the central bank have subsided.
"The Fed didn't really tell us anything that we didn't know. The economy = is stronger and inflation is moderating. That's exactly what the numbers have = been showing us the past few weeks. But the market had some lingering fear that = the Fed would be more hawkish so there is a sense of relief," said Michael = Cheah, a fixed-income portfolio manager with AIG SunAmerica Asset = Management. The Fed raises rates when it wants to slow the economy and dampen inflation and = cuts rates when it wants to spur growth.

[MarineHawk]

I noticed that the 10-year bond rate fell 0.049% today. Do you think it will get back near or below 4.5%? I only ask because mortgage rates seem to follow the 10-year bond up and down. I need to refi my Virginia house sometime in the next 6 months. I would like to wait at least until April. Where do you see mortgage rates going during the rest of the year?

[Adam in CO]

Originally Posted by MarineHawk

I noticed that the 10-year bond rate fell 0.049% today. Do you think it will get back near or below 4.5%? I only ask because mortgage rates seem to follow the 10-year bond up and down. I need to refi my Virginia house sometime in the next 6 months. I would like to wait at least until April. Where do you see mortgage rates going during the rest of the year?

My crystal ball is on the fritz, sorry.

The bond market has a nice, slow, steady decline. I would see what a 90 day lock would cost you now, anyway. It might be worth it.

[MarineHawk]

Originally Posted by Adam in CO

My crystal ball is on the fritz, sorry.

The bond market has a nice, slow, steady decline. I would see what a 90 day lock would cost you now, anyway. It might be worth it.

Thanks Adam.

[KenP]

Originally Posted by Adam in CO

Amanda is out of the office, sorry.

Fixxxxxed!!!

[MarineHawk]

Originally Posted by Adam in CO

My crystal ball is on the fritz, sorry.

The bond market has a nice, slow, steady decline. I would see what a 90 day lock would cost you now, anyway. It might be worth it.

Why do Poole and Fisher not STFU!?!?!?!?!?

[h2co-pilot]

Originally Posted by Adam in CO

My crystal ball is on the fritz, sorry.

.

Maybe you scratched it last night.

[Adam in CO]

Originally Posted by h2co-pilot

Maybe you scratched it last night.

You dug up this old thread for that?

[h2co-pilot]

Oh. I thought this was from today.

Marinehawk brought it up. One Eye.

[MarineHawk]

Originally Posted by h2co-pilot

One Eye.

LOL