Fed Pauses - You Shouldn't
The Federal Reserve, taking a break from its aggressive rate-cutting policy, chose not to alter key interest rates Wednesday, leaving the Fed Funds rate at 2.00% and everyone wondering where interest rates are headed next.
Since last September, the Fed has cut rates seven times for a total of 3.25%. However, many experts believe that the Fed's decision this Wednesday, along with comments from the meeting itself, indicate an increased concern over inflation. This means the Fed could start increasing rates as early as its next meeting, which takes place in August.
The Fed is in a quandary. The economy has slowed, led by a decline in home sales and rising inflation, stemming primarily from increasing energy prices. The Fed's primary role in relation to the economy is to combat inflation and preserve economic growth. To combat inflation, the Fed will ultimately have to increase interest rates in coming months.
What Does This Mean to You?
Housing booms follow housing busts - and the savvy buyers aren't afraid to jump into a tough market. But these savvy buyers know that homeownership is a long-term investment. Call me to discuss these points and get your purchase strategy on track. Ultimately, population growth and demographics point to a stronger housing market in coming years.
If you are looking to purchase a home, opportunities still exist. With the Fed taking a breather, this doesn't mean you should be taking a break. Give me a call.
Long Realty Company
Oro Valley - Tucson Arizona
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