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FOMC Maintains Policy, Extends Mortgage Purchase Program
When Federal Reserve chairman Ben Bernanke called the recession “very likely over†last week, there was some talk about whether his colleagues on the Federal Open Market Committee agreed. In the policy statement issued Wednesday afternoon, it looks clear that they do.rnrn“Economic activity has picked up following its severe downturn,†reads the Fed’s statement in the first paragraph. The FOMC agreed to keep short-term interest rates at exceptionally low levels “for an extended period,†and none of the 10 voters dissented from the expectation that “inflation will remain subdued for some time.â€
Market Prepares for FOMC Statement
Stocks are flat and the US dollar is nearing 2009 lows as the Federal Reserve prepares to release its monetary policy statement this afternoon. It’s a near certainty that the central bank will hold short-term interest rates in the zero to 0.25% band, which puts the focus on the Fed’s economic outlook and any mention of its exit strategy.rnrn“We would be amazed to see anything in the FOMC statement today that even resembles a hint that the Fed is preparing to withdraw any of the net monetary policy support to the economy,†said Ian Shepherdson from High Frequency Economics. “The
Mortgage Applications Rebound as Rates Reach Four Month Low
Mortgage rates fell below 5% for the first time since mid-May last week, leading to increased appetite for refinancing, new loans, and purchases, an industry survey said Wednesday. The triple-front increases follow a soft performance in the holiday-shortened week before.rnrnThe Mortgage Bankers Association said the average mortgage rate fell to 4.97% in the week ending September 18. That, in combination with the $8,000 tax credit for first-time home purchasers expiring at the end of November, helped mortgage loan application volumes Index expand by 12.8% in the week.
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