As expected, the Fed increased the Funds rate by 0.25% moments ago. The markets were anticipating this move by the Fed and, as I write this post, I’m not seeing any significant rate changes to mortgage interest rates. The rates were already “baked in the cake”. Had the Fed decided to increase rates beyond 0.25% or not to take action, we would potentially be being seeing a reaction with the bond market which would be reflected in mortgage interest rates.
The Fed’s increase the Funds rate to 1.75-2.00% will impact loans that are attached to the Prime Rate as the prime rate follows the Fed Funds rate. So… if you have a rate attached to prime, such as credit cards or a home equity line of credit, your rate just went up 0.25%. It is expected that the Fed will continue to increase the Fed Funds rate (and therefore the prime rate) additional times during 2018.
It’s possible markets may react to Fed Chair Powell’s news conference that follows this announcement. Stay tuned.
PS: The cute baby in this photo enjoying cake is my youngest sister and co-worker, Janette, who will be celebrating her birthday next week. 🙂
Also, if you’re interested in buying a home or refinancing a home located anywhere in Washington state, I’m happy to help you! Click here for a no-hassle mortgage rate quote.
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