FOMC

The FOMC most commonly referred to as the Fed is a group that represents the Federal Reserve System. Their primary responsibility is to regulate the countries monetary policy. The chairman of the Fed (Ben Bernanke), is appointed by the government and is considered one of the world experts on the economy. When the Fed Chairman is discussing anything with the market, he has the ability to create swings in the stock market as his opinion on the state of the economy can be very influential.

The FOMC is made up of a group of ten voting members and five alternate members who must vote on any changes to the Fed policy. Their role is to set the rates for which banks borrow money from the Federal Reserve, often referred to as the Fed Funds Rate and the Fed Discount Rate.
The FOMC meets on average eight times per year, as they raise or lower the Fed Funds rate, banks will typically follow suit and raise the prime rate, which can impact the interest rate on credit cards, auto loans, home equity loans and variable rate mortgages. Changes to the Fed Funds or Fed Discount rate have no direct effect on mortgage rates, as they are not tied into the same market. The FOMC primary goal is to help the economy maintain a level of growth without allowing inflation to become too high.

 

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Rates, News & Advice Articles

March 10, 2010

The stock market has been trading a bit sideways following last weeks surge after the non farm payroll report. The stock market has struggled to rally the last two days, but it appears more likely investors have gained a new confidence in the health of the economy and the likelyhood that the economy... 

March 3, 2010

March has started where February left off for the mortgage industry. Long term interest rates remain near five percent for thirty year loan terms, hovering near the lowest levels the market has witnessed in the past two years. Yields on the closely followed ten year bond have hovered around 3.6% for... 

February 22, 2010

Home loan rates continue moving lower in 2010 as the mortgage industry has benefitted from a pullback in the market. Bond yields over the past week have been relatively unchanged as the yield on the ten year Treasury bond is stil hovering in the upper 3.7% range. The lack of movement in the bond yields... 

February 17, 2010

The stock market has struggled with putting back to back gains together for the better part of the New Year as investors have witnessed a roller coaster ride between sharp rallies and steep declines. The recent two day rally this week has helped bring the Dow back above the 10,000 point level, but has...