To the average American home owner with a home equity line of credit, the Fed leaving the Funds Rate at a target range of 0-0.25% means that they can enjoy their low rate on their HELOC for the time being. Once they begin to adjust the Funds Rate upward, HELOCs which are most often attached to the Prime Rate, will rise as well.
Today's Press Release from the FOMC states:
"Conditions in financial markets improved further in recent weeks. Household spending has continued to show signs of stabilization but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit…."
The Fed reiterated their commitment to "employ all available tools to promote economic recovery" and to the purchase of mortgage backed securities and treasury securities:
"…to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve is in the process of buying $300 billion of Treasury securities. To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October…."
I take this last line to mean that we are not going to see the 4.5% conforming rates that were manipulated earlier this year to the artificial lows. It would take other forces outside the Fed to see rates dip that low again. Only time will tell.