The Federal Reserve has reversed their previously conveyed interest rate plan. Fed Chair Jay Powell indicated there are too many crosscurrents , and the appropriate policy will be to stay pat on the present Fed Funds Rate of 2.25-2.5% for a undetermined period. Only 6 weeks ago the perceived Fed plan was for 3 more moderate rate increases in 2019.
The domestic US economy is still solid, but there has been ongoing global economic weakness in Europe and China. The Fed will be continuing to monitor data, but the Fed Chief considers the present rate is to be considered “neutral”. The case to increase rates “diminished”.
One area of change is the Fed will no longer put the scaling down of their Balance Sheet on autopilot. They accumulated $4.5 Trillion of long term bonds and mortgage backed securities, artificially dropping interest rates to historic loans to prop up asset values (housing prices) when they implemented Quantitative Easing starting in 2008. Now the Fed will adjust the amount held on the balance sheet, based on economic conditions.
The interest rates dropped moderately with the markets hearing the “Fed in now on hold”.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me.
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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