The Federal Reserve voted on Wednesday to again raise the key interest rate one-quarter percentage point, the first of three hikes anticipated for 2017. The rate was increased one-quarter percentage point just three months ago, in December 2016.
“In view of realized and expected labor market conditions and inflation, the [Federal Open Market] Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent,” according to a statement by the Fed. “The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”
The probable decision, which followed encouraging employment figures in February, marks a turning point in policy. The Fed raised the rate only twice in the past decade; Wednesday’s decision quickens the pace, signaling the potential for more aggressive action as the year unfolds.
Information from January 20, 2016
While President Donald Trump did not refer to housing policy in his inauguration speech, his new administration has already taken action in this realm.
The Department of Housing and Urban Development (HUD) issued a statement that the reduction in the Federal Housing Administration (FHA) mortgage insurance premium that was announced last week has been suspended indefinitely.
“FHA is committed to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers,” the HUD statement said. “As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.”
The HUD statement added that “FHA will issue a subsequent Mortgagee Letter at a later date should this policy change.”