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

June 13, 2011

The stock market tried to mount a rally on Monday, but finished the day relatively flat, a growing signal that the pessimism in the market may be around to stay for the summer. The DOW was up almost 100 points in early trading action as investors were looking to buy into some bargains from the sell... 

QRM Yet Another Federal Blunder In Fixing The Housing Market

QRM – Qualified Residential Mortgages is probably the dumbest idea the government has rolled out in the past 24 hours. An idea whose origination stems from the colossal collapse of the economy and U.S. housing markets would ensure the collapse of the American Real Estate Market. The simple economics... 

June 4, 2011

The continued decline in stock prices, weakness in housing and the employment markets over the past sixty days has very few silver linings. The one area that has benefitted from the market changes is the mortgage market, where fixed home mortgage rates have continued to improve. Loan rates dropped to... 

May 26, 2011

May has been a great month for the mortgage market as long term interest rates have moves substantially lower this month following a dip in bond yields. The ten year treasury bond move below 3.1 this week, over seventy basis points off of its high levels of the year. The correlation to fixed mortgage...