The MReport Webcast: Wednesday 4/29/2015

When the Federal Reserve concludes its monetary policy meeting today, the nation could see increased interest rates for the first time in nine years. Though policymakers of the Federal Open Market Committee addressed possible rate increases in its March meeting, officials couldn’t agree on which step to take next. Some policymakers argued that raising rates at the end of the fiscal year would help to stave off inflation, while others argued that the strengthening dollar and declining energy prices would do that on their own. Many also claimed that the economy would be in a better position for rate hikes in another year or so.

While previously, the committee had said it would remain patient with regards to increasing interest rates, once the March meeting concluded, the term patient was removed from its official statement, presumably opening the door for rate hikes at future meetings. The statement read: “With continued improvement in economic conditions, committee members preferred language that would provide the Committee with the flexibility to subsequently adjust the target range for the federal funds rate on a meeting-by-meeting basis."

Interest rates on conventional purchase-money mortgages have risen over the past month, according to a recent index from the Federal Housing Financing Agency. The most recent FHFA index, released Tuesday, revealed that interest rates have increased slightly from February to March on several levels. The average interest rates on all mortgage loans for March jumped 3 basis points from February, from 3 point 77 percent to 3 point 8 percent. But while this is higher than the month previous, these rates are still significantly lower than in March 2014, when the average rates were at 4 point 22 percent.