The Federal Reserve Board’s Open Market Committee (FOMC) increased its target short-term interest rate this afternoon, but the move had been widely anticipated and already priced into markets. However, economic projections from the FOMC members suggested a more aggressive path of rate hikes moving forward.
Mortgage rates drifted slightly higher over the past week, returning to levels last seen in mid-May. That was before political turmoil in Spain and Italy – and escalating U.S.-China trade tensions – pushed rates down from five-year highs. The typical 30-year fixed mortgage rate on Zillow is now 4.44 percent.
A stream of incoming economic data paint a picture of an economy at or near full capacity.
The labor market continues to add jobs, and wage growth has picked up, although it remains sluggish by historic standards. More recently, inflation data have accelerated as well. Inflation is now firmly around the Federal Reserve’s 2 percent target, and rising energy prices and wages could push that higher in the months ahead.
At the same time, global central banks are signaling a somewhat tighter monetary policy stance. The Federal Reserve Board’s Open Market Committee (FOMC) increased its target short-term interest rate this afternoon, but the move had been widely anticipated and already priced into markets. However, economic projections from the FOMC members suggested a more aggressive path of rate hikes moving forward.
Markets are likely to continue digesting the Fed’s recent moves over the next week with no major economic data scheduled for release.
