Fed Has Confidence We're On The Right Track

What happened:

Following the July Meeting of the Federal Open Market Committee (FOMC), Fed Chairman Jerome Powell revealed that the Federal Reserve will once again leave interest rates unchanged, keeping them in the 5.25% to 5.5% range. They have held their federal funds rate, one of the main tools the Federal Reserve has to control inflation, unchanged for a year now.

In comments following the meeting, Chairman Powell said that second quarter inflation data has given the Fed confidence that they're on the right track. Powell stated, "The second-quarter inflation readings have added to our confidence and more good data would further strengthen that confidence."

What it means:

This decision, and Chairman Powell's optimistic tone, line up with what most economists were expecting. Traders are going to start pricing in the probability of a rate cut in September. Powell said, "The question will be whether the totality of the data, the evolving outlook and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market. If that test is met, a reduction in our policy rate could be on the table for as soon as the next meeting in September."

And that could be good news for homebuyers and owners looking to refinance.

How this affects homeownership:

Mortgage rates ticked lower after Chairman Powell's press conference following the meeting. That's a reflection of the optimistic outlook that the committee seems to have that a rate cut will come in September. While that's not assured to happen, lenders are starting to price that in and will continue to look at economic data when setting rates.

With the possibility of lower rates now and in the weeks ahead, it may be a good time for homeowners to refinance their mortgage. And for people who've wanted to buy a home, this news may spur them to start looking more seriously. That could bring more people into the housing market and make landing a home more competitive. That's why you should apply for a mortgage pre-approval now and start working with a loan officer to take advantage of the fluctuation of mortgage rates. **BULLSEYE

Rate helps people with Life's Biggest Purchase (TM). With Offices in 50 states, we assist customers with new home purchases and refinances the way they choose - face-to-face, over the phone, or online – and have funded over $75 billion of loans last year.

Gary Marino is the VP of Mortgage Lending NMLS# 41910 at Rate. Rate NMLS# 2611 139 Chestnut St. Suite 1, Nutley NJ, 07110.(973) 953-8555 www.rate.com/garymarino

Registered Mortgage Broker - NYS Department of Financial Services. Licensed by the NJ Dept of Banking and Insurance**STANDARD