Posted on 02/02/2005 11:42:34 AM PST by presidio9
The Federal Reserve raised its short-term interest rate target by a quarter of a percentage point for the sixth time, and signaled little change in its plan to continue raising rates gradually in the months ahead.
The rate change, which was expected, brings the target for the federal-funds rate, charged on overnight loans between banks, to 2.5% from 2.25%. It was 1% last June.
The statement accompanying the rate change was almost identical to that issued after its last meeting on Dec. 14. Economic growth is "moderate," the jobs market is improving "gradually," and inflation is "well contained." It said it could continue to raise rates at a "measured" pace, and that risks to both economic growth and price stability were "roughly equal."
The move was unanimous among the 12 voting members of the 19-member Federal Open Market Committee, the central bank's decision making body.
The lack of change to the Fed's message reflects the fact that the economy and inflation have largely progressed as expected for the last few months.
(Excerpt) Read more at online.wsj.com ...
Bush needs to rain in the Fed bank if housing dips too much.
They must see some good signs of economic growth over the next few quarters that may need the reins pulled to keep it from becoming over-inflationary. Keeping a steady growth without the spikes.......
Heck I hear this morning it was going to be raised a 1/2 point........
hear = heard
"Bush needs to rain in the Fed bank if housing dips too much."
No financial expert here, but from what I understand we're experiencing a rate hike in short term rates but steady to falling long term rates.
This should insulate the housing industry at least for now?
Fed Reserve Technocrati strike again...
Marx would be proud.
Ham on rye, kiss your sister, as advertised.
Some adjustables are tied to short term rates. But the housing market is not going to collapse even with high rates, only become realistic in certain markets. People who are currently buying $600,000 houses with interest-only or adjustables are speculating on price increases. That speculation, and the corresponding ridiculous prices in certain markets, will end with higher rates. And that is a good thing.
That's still pretty low; you'll see common home mortgages at 10 Yr Treas + .5% (perhaps not the average rate, but still common)...so 4.65% should be doable right now.
...And home loans under 5% while our economy is growing (new home starts are at historical records) are good deals.
Fannie Mae is ticking bomb. When she blows, there's nothing Bush will be able to do about the damage to the housing market.
Given the GSEs make their money by borrowing short term and lending long, NO. Given that they've been borrowing Euros, Yen,Yuan etc. short term and lending dollars long term, Hell No.
No, Marx would be freaked out by a free Market that permits corporations to get interest-free money by issuing stock, by private home-ownership, and by a mortgage industry that gets and loans more money to and from private homeowners than from the government.
Keep in mind that just because *banks* may follow the Fed's lead on interest rates, that the private Market still sets interest rates on Treasury bonds, treasury bills, and home mortgages (among other things).
In fact, Marx claimed that *every* capitalistic society would dive so far and so fast economically that their populations would become impoverished and the people would rise up in armed rebellion.
Marx hasn't been right yet. Compare the U.S. and Japan to Cuba and North Korea after Marxism.
That's backwards. Declines in the Dollar (as implied above) drive *up* home prices.
They serve their masters well!
Precisely.
No, expansion of credit plus false incentives for home indebtedness (not ownership) inflates home prices. This ultimately leads to dollar declines, but as I have said many times, inflation is neither instantaneous or homogeneous.
(here we go again)
Oh!!! I love it when ya talk dirty like that!!!
I'm locked in 30 at 5.
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