The Fed just released their statement that the Fed Funds Rate will remain unchanged stating that current conditions “warrant exceptionally low levels of the federal funds rate for an extended period.”
From the Press Release:
“…the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated….
…the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.”
Here’s the footnote: 1. The Open Market Desk will issue a technical note shortly after the statement providing operational details on how it will carry out these transactions.
Remember, today’s actions do not directly mortgage interest rates however, mortgage rates may be influenced by these actions since mortgage rates are based on mortgage backed securities (MBS).
Mortgage backed securites have improved since the release of the FOMC Statement. DOW is down 38 off of earlier triple digit lows.