The Federal Reserve has organized a Federal Open Market Committee (FOMC) and they conduct meetings in order to decide on some important factors. One such meeting was scheduled on June 22, 2010 and these meetings will be a 2 –day meet. This is the fourth meeting of the year and the fifth on overall consideration. It is the duty and responsibility of FOMC to set the government’s monetary policy and also determine the Fed Funds Rate. Fed Funds Rate is that at which the funds are borrowed by banks from each other.
The previous Fed Funds Rate of a target range of 0.000% to 0.250% was set to be the benchmark rate by the Federal Reserve on December 16, 2008. This range had been the lowest ever Rate but this low rate of zero-point-zero per cent helped a lot in borrowing money cheaply by consumers as well as businesses and this was done in expectation to promote investment and growth.
The Fed Funds Rate was not expected to change after this June Meeting, but this did not ensure the mortgage rate to remain still in Charlotte real estate or similar property in other regions. In contrast, the mortgage rates usually change often while this meeting is scheduled. The press release that will be issued after the FOMC meetings will have comments on the unique strengths, weaknesses, threats, etc of the economy by the FOMC members.
The Wall Street Journal will pay attention to the FOMC’s discussion, study and inspect the words of the FOMC chairman in the press release. When the FOMC’s announcement is good with comments like better-than-expected growth levels and higher-than-expected inflation levels, there will be a rush to leave the bond positions and pay attention to equities. In such a case, the mortgage rates will also shoot up in expectation of a good future for Charlotte investment property. On the other hand, if the FOMC’s announcement is not good, the mortgage rates will plunge.
Thus the relationship between the press releases of FOMC and mortgage rates have been revealed thus helping individuals to expect the future rates