The day after the Fed meeting and…
…they didn’t raise rates. This was a unanimous vote of the Committee.
More importantly, during Bernanke’s speech he confessed that even he was more than curious why the Economy is still in the duldrums and the recovery “frustratingly slow”.
On the Inflation front the Committee pledged to keep rates low for an extended period (a term the Bond markets liked). Indications are it will take another 2 or 3 Fed Meetings before they will consider raising short-term rates, which should take us close the the end of 2011.
On the Monetary front they announced that QE2 would end as scheduled on June 30th with no mention of QE3. The Stock markets reacted very badly to this news in that both QE1 & QE2 have been leading reasons for gains in the market. Once removed, what will happen? The Dow shed 180 points yesterday and is currently down another 215 points.
So the actual news was kinda-sorta what we expected and the Bond market pretty much took it in stride. Now while stocks give up recent gains, rates have improved… but for how long? Volatility still reigns supreme.
Call Todd Abelson at (520) 331-LEND (5363) for all your mortgage needs!