Tuesday, March 28, 2006

Expected Fed Funds Rate Hike

Today is Bernanke's first meeting as Fed Chair. He is expected to flex his muscle and hike rates .25%.

What does this mean? Well, it doesn't necessarily mean doom and gloom for home loan rates. Bond prices and home loan rates often improve after a Fed rate hike, since the Fed is acting to keep inflation at bay and the hike is anticipated by banks. So if the Policy Statement holds no surprises, home loan rates may enjoy some slight improvement this week.

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