Fed Rates Unchanged

According to Liz Dominguez, senior online editor for RISMedia, the Federal Reserve has decided to maintain the target range for the federal funds rate at 0 to ¼ percent.  This was expected that the Fed would leave interest rates unchanged and near zero in order to continue the flow of credit reeling from the coronavirus.  Further the Fed predicts no interest-rate increase through 2022.

“The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” said the FOMC statement.  “The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

To support the flow of credit, the Federal Reserve says it will continue to increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities, “at least at the current pace to sustain smooth market functioning.”

What does this mean for real estate?  While Fed rates do not have a direct influence, mortgage interest rates will likely remain low or flat through the next few years.