A divided Federal Reserve left its policy interest rate unchanged to await more evidence of progress toward its goals... First homebuyers rely on parents to secure loans...
Divided Fed holds fire, signals 2016 rate increase still likely
(Bloomberg) -- A divided Federal Reserve left its policy interest rate unchanged to await more evidence of progress toward its goals, while projecting that an increase is still likely by year-end.
“Near-term risks to the economic outlook appear roughly balanced,” the Federal Open Market Committee said in its statement Wednesday after a two-day meeting in Washington. “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”
The sixth straight hold extends U.S. central bankers’ run of getting cold feet amid risks from abroad and inconsistent signs of economic strength. Now the focus will shift to December as the Fed’s likely last chance to raise interest rates in 2016 -- a move that depends on how the economy, inflation and markets fare in the months surrounding a contentious presidential election.
“The statement is much more hawkish than I thought it would be,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York, who said he expects a rate increase in December. “That just tells you they are revving up the engines.”
Three officials, the most since December 2014, dissented in favor of a quarter-point hike. Esther George, president of the Kansas City Fed, voted against the decision for a second straight meeting. She was joined by Cleveland Fed President Loretta Mester -- in her first dissent -- and Eric Rosengren, head of the Boston Fed, whose previous dissents called for easier policy.
“Our decision does not reflect a lack of confidence in the economy,” Fed Chair Janet Yellen said at the start of her press conference. “Since monetary policy is only modestly accommodative, there appears little risk of falling behind the curve in the near future.”
First homebuyers rely on parents to secure loans
As dwelling prices continue to rise across the country, more first homebuyers are looking to their parents and immediate family members to act as guarantors on their home loans.
The results of the annual First Home Buyer Survey conducted by Mortgage Choice revealed that in 2016, the percentage of buyers who had family acting as guarantors was 4.9%, representing an increase of a full 1% since 2015.
Given current conditions, John Flavell, CEO of Mortgage Choice, said this increase was to be expected.
“This slight jump in demand for home loan guarantors is unsurprising when you consider that property prices have risen fairly substantially across most property markets over the past few years. Many first home buyers are finding it difficult to put a foot on the property ladder without some form of financial support,” Flavell said.
(YIP)
(Bloomberg) -- A divided Federal Reserve left its policy interest rate unchanged to await more evidence of progress toward its goals, while projecting that an increase is still likely by year-end.
“Near-term risks to the economic outlook appear roughly balanced,” the Federal Open Market Committee said in its statement Wednesday after a two-day meeting in Washington. “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”
The sixth straight hold extends U.S. central bankers’ run of getting cold feet amid risks from abroad and inconsistent signs of economic strength. Now the focus will shift to December as the Fed’s likely last chance to raise interest rates in 2016 -- a move that depends on how the economy, inflation and markets fare in the months surrounding a contentious presidential election.
“The statement is much more hawkish than I thought it would be,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York, who said he expects a rate increase in December. “That just tells you they are revving up the engines.”
Three officials, the most since December 2014, dissented in favor of a quarter-point hike. Esther George, president of the Kansas City Fed, voted against the decision for a second straight meeting. She was joined by Cleveland Fed President Loretta Mester -- in her first dissent -- and Eric Rosengren, head of the Boston Fed, whose previous dissents called for easier policy.
“Our decision does not reflect a lack of confidence in the economy,” Fed Chair Janet Yellen said at the start of her press conference. “Since monetary policy is only modestly accommodative, there appears little risk of falling behind the curve in the near future.”
First homebuyers rely on parents to secure loans
As dwelling prices continue to rise across the country, more first homebuyers are looking to their parents and immediate family members to act as guarantors on their home loans.
The results of the annual First Home Buyer Survey conducted by Mortgage Choice revealed that in 2016, the percentage of buyers who had family acting as guarantors was 4.9%, representing an increase of a full 1% since 2015.
Given current conditions, John Flavell, CEO of Mortgage Choice, said this increase was to be expected.
“This slight jump in demand for home loan guarantors is unsurprising when you consider that property prices have risen fairly substantially across most property markets over the past few years. Many first home buyers are finding it difficult to put a foot on the property ladder without some form of financial support,” Flavell said.
(YIP)
