Fed will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion.
NEW JERSEY - As the coronavirus continues to create a spectrum of problems in local communities in Monmouth and the nation itself, federal agencies are stepping in. This is particularly evident in the financial markets.
The key message is simple for families and businesses in need of credit - interest rates on federal funds are near zero! How did we get here in light of the coronavirus pandemic?
According to information released Sunday by the Federal Reserve Board, the available economic data show that the U.S. economy came into this challenging period on a strong footing. The labor market remained strong through February and economic activity rose at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Other details coming into this crisis:
- Although household spending rose at a moderate pace, business fixed investment and exports remained weak.
- More recently, the energy sector has come under stress.
- On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent.
- Market-based measures of inflation compensation have declined; survey-based measures of longer-term inflation expectations are little changed.
The Committee released information on Sunday to address the effects of the coronavirus and the impacts it is expected to have on the country. "In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee's symmetric 2 percent objective."
The financial moves provide positive impacts across every sector and definitely the mortgage market.
The actions taken today are designed to stabilize the financial markets and help an impacted nation weather the storm. These actions assist both homeowners and businesses in support of their credit needs.This will provide an excellent opportunity for many families to obtain excellent financing for their most valuable assets. The Fed cut main interest rates to near zero and boosted assets by 700 Billion. It's a significant event that folks should act upon when and where appropriate.
More information can be found on the Federal Reserve Board's website.
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