Tag Archive for ‘Federal Reserve’

Student Loans Crowding Out Home Purchases

Student and auto loans have historically dominated non-mortgage, non-revolving credit, as seen in the Federal Reserve’s G.19 Consumer Credit report. As of the third quarter of 2018, student loan debt totaled $1.6 trillion.  As student-loan debt has historically made up the majority of non-mortgage, non-revolving credit, homeownership is the opportunity cost for its accumulation. In January 2019, as part of its… Read More ›

Fed Pursues Patience

As expected, the Federal Reserve’s monetary policy body, the Federal Open Market Committee, unanimously agreed to hold steady the federal funds top rate at 2.5%. The Fed’s January statement was consistent with recent policymakers’ comments suggesting a more flexible stance toward monetary policy at the end of last year and the start of 2019. In particular, the statement indicated that… Read More ›

Student and Auto Loans Dominate Non-Mortgage Debt

Preliminary consumer credit data for November 2018 released by the Federal Reserve Board’s G.19 Consumer Credit report, which exclude loans secured by real estate, indicate an increase in outstanding credit of about 6.75% (seasonally-adjusted annual rate) from the previous month. Revolving credit increased at an annual rate of 5.50%, while nonrevolving credit increased at an annual rate of 7.00%. Revolving… Read More ›

U.S. Household Balance Sheet Continues to Recover in Q3 2018

The third quarter Federal Reserve Flow of Funds report showed continued improvement in the financial position of U.S. households with real estate, as the market value of all owner-occupied residential real estate (household owned) rose to $25.6 trillion. According to NAHB tabulations of the quarterly series, the asset or market value of owner-occupied real estate held by U.S. households increased… Read More ›

Fed Raises Funds Rate

As expected, at the conclusion of its September meeting the Federal Reserve’s Open Market Committee raised the short-term federal funds rate 25 basis to a range of 2% to 2.25% . Markets and forecasters are confident that an additional 25 basis point increase will occur in December. The change in monetary policy occurs as the 10-year Treasury rate, which generally moves… Read More ›

Jerome Powell Nominated to Lead the Fed

President Trump has nominated Jerome H. Powell to be the next Chairman of the Board of Governors of the Federal Reserve System. In his role as Chairman of the Board of Governors (“the Board”), Mr. Powell would also chair the Federal Open Markets Committee (“FOMC”), the monetary policy decision making body composed of the other Federal Reserve Board governors and… Read More ›

Implications Of FOMC Normalization Process For Mortgage Rates

In its statement, the Federal Open Markets Committee (FOMC) left its key interest rate unchanged at a range of 1.0 to 1.25 percent. As signaled in its last statement, the FOMC, beginning in October, will initiate the balance sheet normalization program. The contents of this program are described in the June 2017 Addendum to the Committee’s Policy Normalization Principles and… Read More ›

May Meeting of the Federal Open Market Committee – From Idea to Proposal

Beyond confirming that if economic activity continues to unfold as expected another increase in the federal funds rate would be appropriate soon (June), the minutes from the May meeting of the Federal Open Market Committee (FOMC) added relatively little to the picture of the path of monetary policy that was laid out in the post-meeting statement and previous policy discussions…. Read More ›