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Fed Announces Third Rate Hike in 7 Months
As anticipated, the Federal Reserve implemented a quarter-point federal funds rate hike in June, increasing its benchmark target to between 1 percent and 1.25. The rate hike was made “in view of realized and expected labor market conditions and inflation,” the Federal Open Market Committee said.
The decision marks the fifth rate hike since December 2015, when the Fed raised rates after an eight-year hiatus. In March, the Fed governors voted to raise interest rates by 0.25 percent, to a range of 0.75 percent to 1.00 percent, citing an improving labor market and inflation below 2 percent.
These factors have continued into the second quarter of 2017 with unemployment at 4.3 percent and “on trend to fall to 3 percent-something by year-end,” according to Lou Barnes, mortgage broker and writer with Inman.
The Fed sets the rate for the overnight exchange of money by banks; governors adjust the rate to help curb inflation or stimulate growth, depending on their assessment of what would be best for the economy.
Although this rate is not the same thing as the mortgage interest rate that buyers pay when they take out a loan on a home, movement of the Fed rate — up or down — can put pressure on mortgage interest rates, which frequently follow the lead of the 10-year Treasury note, also known as the “long bond.”
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In this issue:
The 10 Fastest Growing Cities in the U.S.
3 Million First-time Homebuyers Shut Out of Home Market in Past Decade
America’s Hottest Real Estate Markets: May 2017
Home Prices Are Increasing, But Mortgages Are Still Cheap
Fed Announces Third Rate Hike in 7 Months
Industrial Real Estate Development Reaches 10 Year High
Real Estate Companies Are Moving to the Cloud
Mortgage Applications Down 12 Percent Since 2016
Why More Millennials Are Finally Buying Real Estate
Why More Real Estate Firms Are Now Offering Mortgages
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