Fed Meeting Minutes Release Hope Of A Stronger Economy With New Measures

The Federal Reserve's Federal Open Market Committee released its customary after-meeting statement on Wednesday. In the context of meeting its dual mandate of stabilizing pricing and achieving maximum employment.

The FOMC statement indicated that although the economy has improved in areas including household spending and labor market conditions, the national unemployment rate remains high and the housing market recovery has slowed.

Fed Says Fiscal Policy Restraining Economic Growth

The FOMC statement said that current fiscal policy and "retrenchment" is restraining economic growth as evidenced by failure to achieve benchmarks set by FOMC as indicators of a healthy economy. Benchmarks include a national unemployment rate no higher than 6.50 percent and achieving an inflation rate of 2.00 percent.

September's unemployment rate was 7.20 percent and inflation has run consistently below the FOMC objective. Not to be confused with the FOMC statement's references to monetary policy, the term fiscal policy refers to the government's budgetary policy.

Committee Sees "Moderate" Economic Growth, Seeks Improvement

While the Fed cited "moderate economic growth," the FOMC statement clearly indicated that the committee is not ready to alter its current policy of quantitative easing and estimates that it will maintain the target federal funds rate at between 0.00 percent and 0.250 percent for a considerable time after the QE bond-buying program is phased out.  

The Federal Reserve currently purchases $40 billion per month in mortgage-backed securities and $45 billion in Treasury securities as part of its QE program. The Fed will also continue its existing policy of reinvesting principal payments it receives on holdings of agency debt and MBS, as well as selling maturing Treasury securities at auction.

These activities are part of FOMC's strategy for supporting low mortgage rates and mortgage markets while making "broader financial conditions more accommodative." The Fed expects these measures to assist with a stronger economic recovery and stabilizing inflation at the Fed's target rate.

Fed To Continue Monitoring Economic, Financial Developments 

FOMC reasserted its position that any decision to alter current QE policy is not solely subject to economic benchmarks, but will be based on the Committee's close review of labor market conditions, inflation pressures, and financial developments.

FOMC commented in its statement that it will continue to review economic and financial conditions in the "coming months" and will decide when to taper its monthly asset purchase according to what is learned.

This suggests that changes to the present QE policy are not anticipated for several months, and that the effects of QE combined with dampened speculation may help with keeping mortgage rates lower.

Federal Reserve : New Economic Stimulus May Be Warranted

The Federal Reserve released its October Federal Open Market Committee (FOMC) meeting minutes last week, revealing a Fed in disagreement about the future of the U.S. economy and about what, if any, stimulus may be warranted in the next 12 months.

The "Fed Minutes" recaps the conversations and debates that transpire during an FOMC meeting, and is published 3 weeks after the meeting adjourns. 

According to the October minutes, FOMC members "generally agreed" that a housing recovery is under way nationwide, citing increased housing prices, higher sales volume, and rising construction in many parts of the country.

FOMC members made no major policy changes at their last meeting, but agreed that a continuation of additional asset purchases would likely be necessary in 2013, in order to achieve a substantial improvement in the labor market.

Other notes from within the Fed Minutes included:

• On housing: Signs of improvement are "encouraging", and mortgage rates are at historic lows
• On inflation: Essentially "unchanged", notwithstanding recent increases in energy prices
• On Europe: Production indicators signal contraction in business activity and expansion
• On employment: Employment is rising, and unemployment remains high

The economic forecast prepared by the FOMC staff shows an uptick in consumer spending, residential construction, and labor market conditions which more than offset recent downgrades in the business fixed investment and the industrial production outlooks.

Through 2013, economic activity is projected to accelerate gradually, supported by a lessening in fiscal policy restraints. The Fed also anticipates that Plymouth home buyers will benefit from looser credit standards.

Low mortgage rates are helping home buyers, too.

According to Freddie Mac, the average 30-year fixed rate mortgage rate was 3.34% last week, down from 3.55% in September. This has given a boost to buyer purchasing power nationwide and the year-end housing market may reflect it. Demand for homes remains strong.

The next FOMC meeting is scheduled for December 11-12, 2012.

Fed Minutes Detail QE3 Discussion; Mortgage Rates Down

The minutes from the Federal Reserve's September Federal Open Market Committee meeting were released Thursday.

The Fed Minutes detail the discussions and debates which shaped the central banker's launch of its third round of qualitative easing since 2008. The minutes also give Wall Street insight into future monetary policy.

At 6,987 words, the Fed Minutes provides a level of detail that was unavailable via the FOMC's post-meeting press release, a documen that, by contrast, ran 562 words.

Despite its large word count, there was very little that was new or surprising in the Fed Minutes, though. This is because, since the Fed's last meeting, Federal Reserve Chairman Ben Bernanke has publicly clarified and re-iterated the Fed's positions on employment, housing and inflation.

The minutes provide a strong backdrop to his comments, however.

For example, with respect to the jobs market, Fed members deemed employment "disappointing", noting that growth in payrolls has been slower in 2012 as compared to 2011, and that the expansion rate of today's job market is too slow to make significant progress against the national unemployment rate.

The Fed Minutes also included the following notes :

• On housing : Further improvement is occurring, albeit from a "depressed level"
• On inflation : Risks appear "tilted to the downside", but energy costs pose risks
• On Europe : A "slight improvement", but still a risk to global economic activity

Of greatest interest to home buyers in Minneapolis and rate-shopping refinancers, though, was the Fed's discussion of its QE3 program. The program was introduced to help suppress mortgage rates nationwide which, the Fed believes, will make "broader financial conditions" more accommodative.

The Fed plans to purchase $40 billion in mortgage-backed bonds monthly for a "considerable" period of time after the U.S. economy has already shown signs of full recovery and, since the launch of QE3, 30-year fixed rate mortgage rates are down 19 basis points to 3.36% nationwide, on average.

The next Federal Open Market Committee meeting is scheduled for October 23-24, 2012. 

Mortgage Rates Dropping After Release Of Fed Minutes

Eariler this week, the Federal Reserve released the minutes from its 2-day meeting which ended August 1, 2012. Since the release, mortgage rates have dropped.

The Fed Minutes are released on a schedule, three weeks after the FOMC adjourns from one of its 8 scheduled meetings of the year.

The Fed Minutes are meeting minutes; like you'd see after a corporation shareholder meeting, or after a condo board meeting. Specifically, the Fed Minutes details the conversations among Federal Reserve members which shape our nation's economic policy.

The most recent Fed Minutes show a central bank closer to adding new market stimulus that previously believed.

At its last meeting, the Federal Reserve's debate focused on the rate of economic growth and whether it was occurring too slowly to be long-lasting. The Fed appears to think so. Without a "substantial and sustainable strengthening" in the pace of economic expansion, it said, additional monetary stimulus would be "warranted fairly soon".

Other notes from within the Fed Minutes included :

• On employment : Unemployment rates will "decline only slowly"
• On housing : The market appears "to have improved, somewhat"
• On inflation : Retail energy costs are keeping consumer prices low

However, the Fed expressed an "unusually high level of uncertainty" about its assessments owing to the ongoing European sovereign debt problems. "Spillovers" remain possible and default threats continue to weigh on markets. 

The Federal Reserve's next scheduled meeting is September 12-13, 2012.

Since the minutes were released -- and for the first time this month -- mortgage rates in Minnesota made a big move lower. This is in contrast to the rest of August through which mortgage rates have climbed steadily.

According to Freddie Mac, on August 1, the average 30-year fixed rate mortgage rate was 3.49% nationwide. Today, the rate is 3.66%. Between now and the Fed's next policy-making meeting September 13, though, mortgage rates are subject to change. If today's mortgage rates fit your budget, consider locking in. 

Fed Minutes Suggest Fiscal Stimulus Later This Year

The Federal Reserve released the minutes from its June Federal Open Market Committee meeting, revealing a Fed divided on the future of the U.S. economy. Mortgage rates are higher after the release of the minutes.

The Fed Minutes is the detailed recap of an FOMC meeting. It is the companion piece to the more brief, more well-known post-meeting FOMC press release.

For a comparison, whereas the Fed's June 20, 2012 press release contained 5 paragraphs and 490 words, the same meeting's minutes contain 62 paragraphs and 7,508 words. The extra detail afforded by the extra words Wall Street gives insight into the nation's central banker.

The June Fed Minutes, for example, suggest that the Fed may soon add new economic stimulus. 

Recent data suggests that the U.S. economy is expanding, but more slowly that it was at the start of the year. The Fed acknowledged that this, in part, is the result of "below-trend" growth in Euro-area economies, plus a general slowdown in China.

The Fed also said that "strains in global financial markets" continue to pose "significant downside risks" to the U.S. economy. The Fed expects U.S. growth to "moderate over coming quarters".

Other notes from with the Fed Minutes included : 

• On housing : Home sales, construction and prices suggest improvement
• On inflation : Prices are stable, and inflation will remain "subdued" through 2014
• On new policy : Rapid fiscal tightening poses a "downside risk" to the economy

In addition, there was discussion about whether the Fed is missing its dual mandate of low inflation and low unemployment. Several Fed member discussed the need for new stimulus to raise employment and to raise the rate of inflation. This action could occur as soon as next month.

If the stimulus was enacted, mortgage rates would likely rise because inflation, in general, is a threat to low mortgage rates.

The next Federal Open Market Committee meeting is a 2-day affair scheduled for July 31-August 1, 2012. 

Is More Fed-Led Stimulus On Its Way?

The Federal Open Market Committee released its April 2012 meeting minutes this week, revealing a Federal Reserve in the ready in the event additional monetary stimulus is needed.

The Fed Minutes function much like the minutes from a business meeting; or, condominium association meeting, for example. It's a detailed review of the conversations and debates between FOMC members, and is typically published 3 weeks after a Federal Reserve meeting.  

The Fed Minutes is a follow-up statement on the FOMC's more well-known, post-meeting press release. It's also much more lengthy.

Whereas the April 25, 2012 press release totaled 444 words, the Fed Minutes spanned 6,618. 

Those extra words are important, too, because the detail offered within the Fed Minutes lends insight into how our nation's central bank views the U.S. economy, its strengths and weaknesses, and its threats.

From the Fed Minutes, some of the Fed's comments includes :

• On employment : Unemployment may remain elevated through 2014
• On housing : Tight underwriting is "holding down" the housing market
• On rates : The Fed Funds Rate should remain low until late-2014

There was also substantial talk about Europe and its role in the U.S. economy. Notably, U.S. financial institutions have been actively reducing their European exposure to contain damage in the event of a full-blown economic crisis abroad.

This has had the net effect of lowering mortgage rates in Minnesota. Mortgage bonds often benefit from economic uncertainty.

In addition, because several Fed members acknowledged a willingness to add new stimulus to the U.S. economy, mortgage markets are accounting for the possibility it could happen. It's unclear whether stimulus would be added after the Fed's next meeting, or at some point later in the year, or at all.

The FOMC has its next scheduled meeting June 19-20, 2012.

Fed Minutes Causes Mortgage Rates To Rise Suddenly

The Federal Reserve has released the minutes from its last FOMC meeting, a 1-day affair held March 13, 2012. Mortgage rates in Minnesota are rising on the news.

For the un-indoctrinated, 3 weeks after it meets, the Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes.

Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.

The Fed Minutes is a lengthy publication, often filling 10 pages or more. By contrast, the more well-known publication from the FOMC -- its post-meeting press release -- tends to span 6 paragraphs or less.

The extra detail contained within the Fed Minutes is Wall Street fodder, especially given the current economic uncertainty. Investors look to the Federal Reserve for clues about what's next for the U.S. economy.

Lately, the minutes has made an out-sized impact on mortgage rates. The Fed's words continue to swing the mortgage-backed bond market.

Today is no different.

March's Fed Minutes is a dense one and markets are reacting. The text shows a central bank softly divided on future U.S. economic policy, and in debate about whether existing market stimulus should be removed.

The Fed has said that it's expecting high levels of unemployment and low levels of inflation in the coming months, an outlook that leaves little reason to introduce a third round of stimulus. This is the primary reason why mortgage rates in Minneapolis have been climbing since the Fed Minutes' release.

Since mid-March, mortgage rates dropped on speculation that the Federal Reserve would introduce a mortgage bond purchase program this quarter. Today, those expectations have reversed.

According to the minutes, the Federal Reserve believes that additional market stimulus would only be necessary "if the economy lost momentum", or if inflation remained too far below 2 percent per year. Currently, Core PCE -- the Fed's preferred gauge of inflation -- is running slightly below 2 percent.

The Federal Reserve's next scheduled meeting is April 24-25, 2012 -- its third of 8 scheduled meetings this year.

Fed Minutes Suggest New Economic Stimulus Next Week

The Federal Open Market Committee released its November 2011 meeting minutes, revealing a Fed split on whether new stimulus is needed for the U.S. economy.

The Fed Minutes is published 8 times annually, three weeks after each scheduled Federal Open Market Committee meeting. It's the official record of the meeting's policy-shaping debates and dialogues.

The Fed Minutes is the lengthier companion piece to the FOMC's more well-known, post-meeting press release.

As compared to press release which is concise and focused at 492 words, the Fed Minutes is comprehensive and broad, totalling 7,682 words over 11 pages, complete with charts.

The November minutes reveal Fed opinions on a variety of economic issues :

• On employment : Unemployment will gradually decline through 2014
• On housing : The market remains depressed. Foreclosures are "holding back" growth.
• On rates : The Fed Funds Rate should remain low until mid-2013

There was also discussion about the government's revamped HARP program, and how it should help more homeowners get access to low mortgage rates. The Fed sees this as a positive for housing, and for the economy.

There was little in November's Fed Minutes to surprise Wall Street, however, the Fed did discuss the possibility of new market stimulus, a topic Wall Street expects the FOMC to address next week at its last scheduled meeting of 2011.

Should the Fed introduce new market stimulus next week, and should it arrive in the form of additional mortgage bond purchases, expect for mortgage rates to fall across Minnesota and nationwide. If the Fed declines new stimulus, mortgage rates should rise.

The FOMC meets Tuesday, December 13, 2012.

What's Ahead For Mortgage Rates This Week : October 16, 2011

Mortgage bonds suffered through another tough week last week as rising optimism that Eurozone leaders will "rescue" Greece plus stronger-than-expected economic data in the U.S. led bonds lower for the second straight week.

Conforming and FHA mortgage rates in Minnesota moved sharply higher. After reaching an all-time low just two weeks ago, 30-year fixed mortgage rates are now at a 2-month high.

There were several big stories in the mortgage bond market last week. Each was bad for consumer mortgage rates.

The first big story was tied to Greece. As meetings continue between Eurozone leader and rhetoric heats up, it's becoming increasingly clear that Greece will receive its next wave of debtor aid. The planned rescue of Greece is undoing the safe haven buying that characterized the mid-summer financial markets. 

With investors more willing to take risks, mortgage bonds are selling off, and rates are rising.

The next big story was the release of the Federal Reserve's September meeting minutes. The central bank's meeting recap showed that the Fed considered additional stimulus beyond its Operation Twist, even as inflationary pressures are increasing. Because inflation lowers the value of outstanding mortgage bonds, rates climbed post-release.

Lastly, last week we learned that the U.S. consumer will not be deterred. Retail Sales grew 1.1 percent in September -- much more than Wall Street's expectation. This, too, caused a mortgage bond sell-off and led to a late-Friday surge in rates.

Markets should open worse this morning, pressuring rates higher yet again. However, there's plenty of data this week for which rate shoppers should be watching :

• Tuesday : Producer Price Index; Housing Market Index
• Wednesday : Consumer Price Index; Housing Starts
• Thursday : Existing Home Sales

In addition, there are 8 Fed speakers this week. Each can move markets.

Despite rising rates, mortgage rates remain low nationwide. If you've been shopping for a rate, it's not too late to lock in. Talk to your loan officer and make a plan to get locked, and get closed. 

Fed Minutes : Fed Considered Additional Stimulus In August

The Fed publishes meeting minutes 8 times annually -- three weeks after each scheduled Federal Open Market Committee get-together. The Fed Minutes summarizes the FOMC meeting.

The Federal Reserve released the minutes from its August 9, 2011 Federal Open Market Committee meeting Tuesday.

The Fed Minutes contained no surprises and, as a result, mortgage rates across Minnesota and nationwide have idled.

Although it gets less press attention, the Fed Minutes is every bit as important as the more highly-publicized, post-meeting statement from the FOMC. With its detailed record of conversation, the Fed Minutes highlights the discussions and debates that shape our nation's monetary policy.

For example, here is some of what was said at the Fed's August 2011 meeting :

• On growth : Economic growth had been slower than the committee expected
• On housing : The market "remains depressed". Underwriting standards are "tight".
• On rates : The Fed Funds Rate will remain low until mid-2013

In addition, the Fed talked about whether a third round of asset purchases should be announced. Ultimately, that plan was rejected by consensus.

The FOMC's next meeting is a 2-day meeting, scheduled for September 20-21. The meeting was originally scheduled for just one day, but Fed Chairman Ben Bernanke chose to extend it to two. Wall Street believes that the extension was made so Fed members could discuss new forms of economic stimulus.

Depending on the form of said stimulus -- if it should even occur -- mortgage rates may rise or fall. We can't know for certain unti the size and scope of the Fed's plan is known.

For now, mortgage rates remain rock-bottom. There's more room for rates to rise than to fall. If you're shopping for a loan and the rate looks right, therefore, consider locking on it.

Fed Minutes Hint At New Economic Stimulus

The Federal Reserve released its June 2011 Federal Open Market Committee meeting minutes Tuesday. It contained no surprises and, as such, mortgage rates in Minnesota have idled in the hours since.

The Fed Minutes is published 8 times annually, three weeks after each scheduled Federal Open Market Committee meeting. It's the official log of the meeting's conversations and debates.

The Fed Minutes is the lengthier companion piece to the FOMC's more well-known, post-meeting press release. As compared to the brief-and-focused press release,by comparison, the Fed Minutes are long and detailed.

June's press release was 458 words long. Its minutes totaled 6,889 words.

The June minutes reveal some interesting perspectives from within the Federal Reserve, too.

• On growth : Economic recovery had been slower than the committee expected
• On housing : The market remains depressed. Foreclosures are "holding back" construction.
• On rates : The Fed Funds Rate should remain low for an "extended" period

In addition, the Federal Reserve discussed whether a new round of economic stimulus was necessary. Committee members agreed that a poor outlook for employment in the medium-term would make this move more likely.

There was little that surprised Wall Street in the June Fed Minutes. This is why market reaction has been muted since its release.

The FOMC meets next August 9. If jobs data continues to weaken between now and then, expect the stimulus chatter to continue. It's unclear, however, how this would impact mortgage rates.

For now, mortgage rates remain near their all-time lows, and they have much more room to rise than to fall. If you're shopping for a loan, therefore, the timing is right for a lock.

What's Ahead For Mortgage Rates This Week : May 23, 2011

Mortgage markets were unchanged last week, despite improving on four of five days. Economic data was worse-than-expected almost across the board, but neither FHA nor conforming mortgage rates in Minnesota budged.

Instead, markets grappled with the just-released Fed Minutes which weighed heavily on investors and on Wall Street.With the release of the minutes, it's increasingly clear that the Federal Reserve will end its support for bond markets on schedule in June, and that a Fed Fund Rate hike is possible within the next 12 months.

Not surprisingly, the date of the Fed Minutes release -- Wednesday -- was the singular "down day" for mortgage markets last week.

After falling for 4 straight weeks, Plymouth mortgage rates appear to have troughed. This week they could rise, and there's no shortage of data on which for bonds for trade.

• Tuesday : New Home Sales; Speeches from Fed's Plosser and Bullard
• Wednesday : Durable Goods; FHFA Home Price Index
• Thursday : GDP; Initial Jobless Claims
• Friday : Core PCE; Pending Home Sales; Consumer Sentiment

There's other forces on markets, too. First, there are 3 bond auctions -- a 2-year, a 5-year, and a 7-year. Weak demand for any of the three will lead mortgage rates higher.

And, second, this is a holiday week. Memorial Day is next Monday and, with the 3-day weekend ahead, expect large numbers of Wall Streeters to skip out on Friday (and likely part of Thursday, too). As the week concludes, therefore, bond volume will thin, amplifying mortgage rate movement -- up or down.

If you're shopping for a mortgage, it's a good time to look at locking in. As the week progresses, mortgage rates should become less predictable and more volatile.

Fed Minutes Put The Heat On Mortgage Rates To Rise

The Federal Reserve released its April 2011 Federal Open Market Committee meeting minutes Wednesday. In the hours since, mortgage markets have worsened; rates in Minnesota are higher by 1/8 percent this morning, at least.

The "Fed Minutes" is published 8 times annually, three week after each scheduled FOMC meeting. The minutes are the Federal Reserve's official recap of the conversations and debates that shaped the prior FOMC session.

Another way to consider the Fed Minutes is as the companion piece to the more well-known FOMC press release. The press release is issued on the day of adjournment, and is brief, narrow, and high-level. The statement makes broad comments on the economy and outlines new monetary policy.

By contrast, the Fed Minutes is delayed, lengthy, and rife with details. The minutes highlights arguments and discussion points between Fed members, and digs deep into underlying economic issues.

The FOMC press release is measured in paragraphs. The Fed Minutes is measured in pages.

Here is some of what the Fed discussed last month:

• On inflation : Higher levels are "transitory"; will level-off with commodity prices
• On housing : The market remains depressed. "Vacant properties" are harming construction.
• On stimulus : The Fed will stick to its $600 billion support plan

In addition, at its meeting, the Federal Reserve discussed an exit strategy for its market support. The details are undecided, but the debate shows that the Fed is anticipated a change in policy sometime soon. 

Wall Street estimates that a gradual economic tightening will begin within 12 months.

Mortgage rates have been fading since mid-April. The Fed Minutes may be the catalyst of a reversal. The Federal Reserve expects growth in the U.S. economy and growth tends to boost stock markets at the expense of bonds.

As bond markets fall, mortgage rates in Maple Grove rise.

Currently, Freddie Mac reports the average 30-year fixed mortgage rate as 4.63% -- the lowest of the year.

What's Ahead For Mortgage Rates This Week : April 11, 2011

Mortgage markets worsened last week as energy costs remained high, and jobs data looked strong. The safe haven buying that characterized the March mortgage market has subsided.

it's driving mortgage rates higher across Wisconsin.

Conforming and FHA mortgage rates rolled back 8 weeks worth of improvements last week and are now back to mid-February levels. The rise in rates is hurting refinance activity and home affordability.

The biggest story from last week figures to carry forward into this one -- the Federal Reserve's take on inflation.

In the minutes from its March meeting, the FOMC was shown to have discussed the possibility of raising the Fed Funds Rate ahead of schedule, and to be watching near-inflation closely. Both developments are in response to a growing economy with rising price pressures.

Mortgage rate shoppers should take note.

Inflation is a mortgage-rate killer. When inflation is present in the economy, all things equal, mortgage rates rise. Sometimes by a lot. And, usually, just the expectation of inflation is all it takes to make mortgage rates jump.

That's what we saw last week.

This week, keep a close watch on new inflation-related data set for release. This includes Tuesday's Retail Sales data, Wednesday's Producer Price Index, and Thursday's Consumer Price Index. Each release can potentially move mortgage rates although, if recent trends are an indication, expect for rates to rise.

Mortgage rates in Maple Grove remain historically low. If you're shopping for a mortgage, consider locking as soon as you can.

Fed Minutes Help Push Mortgage Rates To 4-Month High

The Federal Reserve released its November 2-3, 2010 meeting minutes Tuesday afternoon. Mortgage rates in Wisconsin have been on the move since.

The Fed Minutes is a comprehensive review of Federal Open Market Committee meetings; a detailed look at the debates and discussions that shape our country's monetary policy. The report is published 3 weeks to-the-day after the FOMC adjourns.

Fed Minutes add depth to the briefer, more well-known "statement" to the markets which is issued upon adjournment. As a comparison:

• The November 3 statement contained 497 words
• The November 3 meeting minutes contained 6,623 words

If the Fed Statement is the executive summary, the Fed Minutes is the novel. And, the extra words matter.

When the Federal Reserve publishes its minutes, it gives clues about the groups next policy-making steps.  For example, in November's minutes, it's revealed that the Fed discussed setting inflation targets for the economy; holding occasional policy briefings for the press; and, working to set yields on instruments such as the 10-year Treasury note.

In addition, the Federal Reserve acknowledged a video conference hosted October 15, the second such "unannounced" meeting of the year.  The other was May 9, 2010.

Bond markets have not taken kindly to the Fed Minutes. The minutes show a propensity toward Fed "action", most of which markets believe to be inflationary. Inflation leads to higher mortgage rates and that's exactly what we've seen.

As compared to Tuesday morning, mortgage applicants in Maple Grove are finding conforming and FHA mortgage rates to be higher by as much as 0.375 percent. In "real life" terms, assuming a 30-year term, that's an extra $264 in annual mortgage payments per $100,000 borrowed.

If you're still rate shopping, consider getting locked today. As a result of the recent shift, mortgage rates are now at a 4-month high.

Fed Minutes Edge Mortgage Rates Higher

The Federal Reserve released its September 21, 2010 meeting minutes Tuesday afternoon. Mortgage rates in Wisconsin are slightly higher today.

It's unwelcome news for this season's home buyers, and existing homeowners with plans to grab lower rates. Mortgage rates made new lows last week and may have reached a turn-around point.

The "Fed Minutes" is published 8 times annually, and is the official meeting recap for the Federal Open Market Committee. Similar to the meeting minutes released after a corporate conference or condo association gathering, the Fed Minutes details the conversation and debate between meeting attendees.

Minutes are the lengthy companion to the Fed's brief, post-meeting press release.

Because of its content, the Fed Minutes is closely read by Wall Street and economists. It's insight into the talk that shapes our nation's monetary policy and, within the text, there's often clues about the Fed's next move.

Here's some of what the Fed discussed last month:

• On inflation : It's running at lower-than-optimal levels
• On housing : Post-tax credit, housing stalled in July
• On stimulus : The Fed may intervene in open markets within the next few months

 

The over-riding theme within the minutes was that the U.S. economy is growing a steady pace, albeit slower than what's optimal. The Fed is prepared to push things along if the economy slows further and news like that is helping stock markets.

Bond markets are losing. Rates are rising.

For now, mortgage rates hover near all-time lows.  If you haven't locked a mortgage rate yet, your window may be closing.  Once the economy turns around for certain, mortgage rates will be among the first of the casualties.

August's Fed Minutes Lead Mortgage Rates Higher

Home affordability took a slight hit this week after the Federal Reserve's release of its August 10 meeting minutes.

The "Fed Minutes" is a lengthy, detailed recap of a Federal Open Market Committee meeting, not unlike the minutes published after a corporate conference, or condo association gathering. The Federal Reserve publishes its meeting minutes 3 weeks after a FOMC get-together.

The minutes are lengthy, too.

At 6,181 words, August's Fed Minutes is thick with data about the economy, its current threats, and its deeper strengths. The minutes also recount the conversations that, ultimately, shape our nation's monetary policy.

It's for this reason that mortgage rates are rising. Wall Street didn't see much from the Fed that warranted otherwise.

Among the Fed's observations from its minutes:

• On the economy : The recession was deeper than previously believed
• On jobs : Private employment is expanding slowly
• On housing : The market was "quite soft" in June

Now, none of this was considered "news", per se. If anything, investors were expecting for harsher words from the Fed; a bleaker outlook for the economy. And, because they didn't get it, monies moved to stocks and mortgage bonds lost.

That caused mortgage rates to rise.

The Fed meets 8 times annually. Its next meeting is scheduled for September 21, 2010.  Until then, mortgage rates should remain low and home affordability should remain high. There will be ups-and-downs from day-to-day, but overall, the market is favorable.

The Fed's June Minutes Keep Mortgage Rates In Rally-Mode

According to Freddie Mac, mortgage rates made new all-time lows this week and the good news is that rates look poised to fall even more.

Since the Federal Reserve's release of its June 2010 meeting minutes Wednesday, mortgage rates are dipping even more and one of the main reasons why is because of some choice Fed words.

If you've never seen a Fed Minutes release, it reads academic. The document is page after page of stats, facts and figures about the U.S. economy, accompanied by an in-depth recap of the intra-Fed member debates that shape the nation's monetary policy.

At 7,333 words, the June Fed Minutes is the unabridged version of the more well-known, post-meeting press release.  The corresponding press release was just 360 words.

As it turns out, Wall Street didn't like what it read in the minutes.  Specifically:

1. The Fed expects below normal growth through 2012
2. The Fed's outlook for employment has dipped
3. Credit conditions are easing only slowly

Furthermore, the Fed said its action may be needed if the economy were "to worsen appreciably".

Overall, the economic optimism the Fed displayed earlier this year appears to be waning. The economy is moving forward -- just not as quickly as expected.  That should bode well for mortgage rates and home shopping in Plymouth.

Mortgage rates were down Wednesday afternoon and Thursday and remain historically low. All it would take to reverse rates, however, is a run of positive news on jobs, growth, and consumer spending.  Therefore, if you know you need to lock a mortgage rate in the near-term, it may be a good time to make the call. 

Lock your mortgage rate and move on.

The Fed's April Minutes Push Mortgage Rates Even Lower

After starting the day in the red, mortgage rates rebounded Wednesday afternoon after the Federal Reserve released its April 27-28, 2010 meeting minutes.

It's good news for home buyers and would-be refinancers in Plymouth.  Mortgage rates continue to troll along multi-year lows.

"Fed Minutes" are lengthy, detailed recaps of Federal Open Market Committee meetings, not unlike the minutes you'd see after a corporate conference, or condo association gathering. The Federal Reserve publishes Fed Minutes 3 weeks after each respective FOMC get-together.

The Fed meets 8 times annually.

Because of the minutes' content and density, it's of tremendous value to Wall Street and investors.  Fed Minutes provide a glimpse into the conversations and debates that shape the country's monetary policy.

The broad scope of the published meeting minutes are in sharp contrast to the more well-known, post-meeting press release which reads more like a policy summary.

And the extra words matter.

Here's some of what the Fed discussed last month:

• On Greece : A crisis in Greece could slow U.S. domestic growth
• On housing : Despite government support, growth appears to have stalled
• On its mortgage buyback program : There's little reason to sell mortgage bonds right now

When the markets saw the Fed Minutes, what had been a down day for bond markets turned positive. The less-than-sunny outlook for the near-term U.S. economy sparked bond sales, pushing prices higher.

Mortgage rates move opposite mortgage bond prices.

Wall Street is always in search of clues from inside the Fed about what's next for the economy and post-FOMC minutes usually give good fodder.  April's meeting was no different.

For now, mortgage rates remain near all-time lows but once the Eurozone issues are settled, rates are likely to rise. If you haven't locked a mortgage rate, your window may be closing.  Once the economy is turning around for certain, mortgage bonds will be among the first of the casualties.

The March Fed Minutes Explains Why Home Sales Weren't Worse This Winter

Mortgage markets improved yesterday after the Federal Reserve released its March 16, 2010 meeting minutes. It's good news for in Maple Grove home buyers and rate shoppers -- rates could have just as easily gone the other way.

The Fed Minutes is a detailed recap of the debate and discussion that shapes the nation's monetary policy. The notes are dense; it takes 3 weeks to compile them for publication.

As compared to the more well-known, post-meeting press release, the Fed Minutes are extremely lengthy. For example:

• March 16 press release : 451 words
• March 16 meeting minutes : 6,152 words

If the press release is the executive summary, the Fed Minutes are the novel.

The extra words matter.The minutes recount what the Fed did, how the Fed did it, and what the Fed plans to do next. And, in the minutes, Wall Street looks for clues. 

This is why the report is important to every rate shopper in the country.

When the Federal Reserve publishes the minutes from its meetings, it leave clues about the groups next policy-making steps.  For example, in March's Fed Minutes, it's clear that the Fed's concern about inflation is hugely diminished and that's a major plus for the mortgage bond market.

Inflation causes mortgage rates to rise. The absence of inflation, therefore, helps them to fall.  This improves home affordability, among other things.

Similarly, the Fed Minutes note that real estate sales may have been worse throughout the winter months if not for low mortgage rates and the sense among Americans that home prices were troughing. We may infer, therefore, that rising rates may suppress home sales later this year.

Markets are always looking for clues from inside the Fed and the last meeting's minute signal that the economy is on its way up.  If you're looking for a bargain in the housing market, your window to act may be closing.