Yesterday, the Federal Reserve Bank (commonly referred to as just “The Fed”) decided to leave the federal funds rate, which influences mortgage interest rates, unchanged for right now, though hinted at future increases that experts speculate could come as early as September.

                In their statement released yesterday afternoon, the Federal Open Market Committee (or FOMC) made this decision in order to “foster maximum employment and price stability,” after noting that employment remains high, household and business investment spending have grown, and inflation remains balanced. Future rate increase decisions will be based on the same indicators moving forward.  

                The Fed is the central bank of the United States that monitors the financial health of the US economy and sets monetary policies in order to promote or maintain stability, while also managing inflation. The board meets 4 times per year to review data and economic projections to establish the federal funds rate: the rate at which banks lend money to other banks. This rate impacts the interest rates paid on all loans, including mortgages and auto loans. When The Fed raises the federal funds rate, mortgage interest rates will increase as well. The Fed’s policies also have an impact on inflation, employment rates, and even the value of our currency!

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