Interest Rates Likely to Stay Low Longer

Interest Rates Likely to Stay Low Longer

The Federal Reserve once again decided not to raise the federal funds rate this month, saying the economy is still falling short of benchmarks. That likely means home buyers will be able to take advantage of lower mortgage rates for awhile longer too. Federal Open Markets Committee members released a statement Wednesday that said in an effort to “support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current zero to one-quarter percentage target rate for the federal funds rate remains appropriate.” The FOMC will not decide on a rate hike again until its next meeting in December 2015. At that time, the FOMC says it will assess progress with labor conditions as well as inflation pressures and expectations in deciding whether to raise rates at that time. Analysts largely predicted the Fed was going to raise rates in September, which did not happen. Jonathan Smoke, realtor.com®’s chief economist, predicted earlier this week that a rate hike was not likely.