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The Federal Reserve voted Wednesday to leave its benchmark interest rate alone, citing signs of a slowing economy between the January-to-March quarter. The benchmark rate will stay low, near 1 percent. However, the Fed cautions that it expects that a strengthening economy and job market in the coming months will justify a higher rate later this year.<\/p>\n
\nRead more<\/strong>: Rising Rates, Rising Sales<\/span><\/p>\n<\/blockquote>\n
Mortgage<\/a> rates aren\u2019t directly tied to the Fed\u2019s benchmark rate but are often influenced by them.<\/p>\n
The Fed\u2019s pause to raising rates at Wednesday\u2019s meeting comes after it increased its benchmark short-term rate in December and March. Many economists predict that the Fed will raise rates at its next meeting in mid-June.<\/p>\n
\u201cToday\u2019s FOMC decision is only a short-term, temporary pause,\u201d says Lawrence Yun, the chief economist for the National Association of REALTORS\u00ae. \u201cWith no change in monetary policy, mortgage rates look to remain within the narrow band of 4 percent to 4.5 percent for the foreseeable future. However, the future path of rate hikes and changes in bond purchase levels will depend upon inflationary pressures. Without adequate increases in new housing<\/a> production, both rents and home prices will accelerate, and therefore complicate the Fed\u2019s desire for full employment and price stability.\u201d<\/p>\n
Source: \u201cFed Leaves Rates Unchanged But Signals Further Hikes Ahead,\u201d ABC News (May 3, 2017)<\/em><\/p>\n<\/div>\n<\/div>\n
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