WASHINGTON – The Federal Reserve made no changes to its benchmark interest rate, according to an announcement released when its meeting ended on Wednesday. Federal interest rate changes, either up or down, can directly impact adjustable-rate mortgages and, indirectly, fixed-rate mortgages.
In addition, nothing in the Fed’s accompanying statement suggests that further interest rate cuts are on the horizon, assuming nothing major in the economy changes. That likely means little change early next year, though economists are split on whether another interest rate cut may occur later in 2020.
Fed Chairman Jerome Powell once worried that a robust job market would push consumer prices higher than the 2% level. However, inflation appears stable even with almost full employment. The current unemployment rate is at 3.5% – a 50-year low – but inflation was well under the 2% benchmark in October when it stood at 1.3%.
Economists usually scour the Fed statement to look for signs of intention – whether the Fed is leaning toward lowering or raising rates at its next meeting. However, the latest statement appears to suggest neither, at least over the short term.
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