CFAH

As predicted, the Federal Reserve has just raised its benchmark Federal Funds rate, upping its target range by another 0.25 percent (25 basis points) and signaling expectations for three more quarter-point increases in 2018.

The Fed dropped the benchmark rate five (5) percentage points between August of 2007 and the end of 2008, a move which helped drive mortgage rates down to an all-time low of 3.31 percent in 2012. The Fed has since raised its target by a total of 1.25 percent.

Following the Fed’s announcement today, the yield on 10-year Treasury notes, which drives the 30-year mortgage rate, was little changed. And as of last week, the average rate for a 30-year mortgage was running around 3.94 percent with the probability of a rate hike this week already priced-in.

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