No Chance of Higher Rates Anytime Soon, According to Fed Officials

Recent comments from top Federal Reserve Officials are making it clear they are not yet worried about inflation and they certainly expect to leave their target interest rate alone for quite awhile.

Atlanta Federal Reserve President Dennis Lockhart, in a speech before the Rotary Club of Nashville, said:

“Certainly we have low interest rates today…I would expect that to continue for some time.”

He was also upbeat about the coming recovery of the markets.

“The economy is stabilizing and recovery will begin in the second half [of this year].” However, the rebound “will be weak compared with historic recoveries from recession…current economic conditions are mixed at best.”

He summed up his position by saying “nothing in the incoming data has altered our view that the economy is nearing a bottom and will soon begin a very slow recovery.”

Fed Chairman Ben Bernanke said in the Wall Street Journal today that:

“Since the onset of the financial crisis nearly two years ago, the Federal Reserve has reduced the interest-rate target for overnight lending between banks (the federal-funds rate) nearly to zero… My colleagues and I believe that accommodative policies will likely be warranted for an extended period.”

So we probably won’t see mortgage rates rising much in the near future due to Federal Reserve actions. That doesn’t mean that they can’t or won’t climb. Any increase will be simply a result of Treasury yields and market consensus on the state of the economy.

Ads By Google

Trackback URI | Comments RSS

Leave a Reply

Privacy Policy