What Will This Week’s Fed Meeting Mean for Mortgage Interest Rates?

The Federal Open Market Committee (FOMC) is meeting September 21 and 22 to discuss the next steps on broad issues related to monetary policy. But in the mortgage industry, there’s only one question on brokers’ minds: What’s going to happen to interest rates? As of today, the best guess is: Not much. Fed-watching is an industry unto itself, and the phrase that’s caught their attention is “substantial further progress.” That’s how Fed Chairman Jerome Powell described the conditions under which the institution would begin reducing its monthly bond purchases — currently $120 billion — as part of his regime of “qualitative easing.” Shrinking the money supply, or even talk of shrinking the supply, is expected to lead to higher interest rates and,…

Powell: Fed Will Rein In Pandemic Policies, But Low Interest Rates Remain

In a speech at the annual Jackson Hole symposium, Federal Reserve Chairman Jerome Powell said the central bank is likely to begin withdrawing some of its pandemic policies before the end of the year. Still, interest-rate increases won’t be coming overnight. That means the Fed will likely begin cutting the amount of bonds it buys each month before the end of the year. But Powell stressed that these cuts should not be seen as indicators that rate increases are around the corner. “The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent…