Chicago, IL (PRWEB) February 21, 2014
The Federal Reserve released their “Minutes of the Federal Open Market Committee” on Wednesday, February 19th, in regards to the Committee meeting on January 28th and 29th of this year. The committee discussed the future of tapering, interest rates, and the general economic outlook.
The discussion regarding interest rates produced generally positive results for homebuyers, as those who wanted to raise interest rates were “in the minority,” according to Wall Street Journal on February 19th. Previously, the Fed had said it would wait until the jobless rate reaches 6.5% before raising short-term rates. Since then they have decided on a jobless rate of 6.6%, which we are approaching quickly. “There’s still no consensus. Some officials want to avoid hard-and-fast thresholds, in part because they have doubts about the reliability of indicators like the jobless rate. Some want to put more weight on financial stability, inflation or the Fed’s own economic projections in the decision.” CF Funding hopes the Fed comes to a consensus that allows reasonable interest rates for homebuyers in 2014.
The committee generally agreed that the taper must continue in 2014, at least for now. Stated in the minutes as recorded by The Wall Street Journal, “These participants judged… that a pause in the reduction of purchases was not justified at this stage, especially in light of the strength of the economy in the second half of 2013.” The committee is referring to positive factors such as high builder confidence and strong annual home price growth, as CF Funding reported earlier this year.
Unfortunately due to news about the taper, stocks fell on Wednesday, February 19th. Although the Fed has been consistent in their views on the taper, many economists expected the committee to change views due to recent economic data. The Dow Jones .DJI fell .56 percent, and the S&P 500 .SPX fell .65 percent.
Ben Bernanke, former Chairman of the Federal Reserve, and Janet Yellen, current Chairman of the Federal Reserve, were in attendance at this meeting, where it was declared “By unanimous vote, the Committee selected Ben Bernanke to serve as Chairman through January 31, 2014, and Janet L. Yellen to serve as Chairman, effective February 1, 2014, until the selection of her successor at the first regularly scheduled meeting of the Committee in 2015.” As CF Funding mentioned in a February 18 article, Janet Yellen is proving very capable and making smart moves to boost the U.S. economy.
CF Funding will keep readers updated as the Fed may change interest rates or bond-buying cuts in 2014. Stay tuned by following CF Funding on facebook at http://www.facebook.com/cffundingcorp.