Subscribe and receive email notifications of new blog posts.
RSS Feed
- 2026 | 12 Posts
- 2025 | 52 Posts
- 2024 | 50 Posts
- 2023 | 55 Posts
- 2022 | 83 Posts
- 2021 | 70 Posts
- 2020 | 43 Posts
17
From Our Lending Partners at Idaho Central Credit Union
The Fed Remains Accommodative; Retail is Bouncing Back
Neither the Federal Reserve meeting nor the economic data had much impact on mortgage markets over the past week. Rates again ended little changed, close to record-low levels.
At Wednesday's meeting, Fed officials confirmed what most investors had anticipated for quite a while. In short, to help support the economy, the Fed has no plans to raise the federal funds rate for the next few years. According to the statement, the Fed will maintain short-term rates near zero until the labor market reaches "maximum employment" and inflation has risen above 2%. Officials also revised their 2020 gross domestic product (GDP) projections from June, which forecasted a decline of 6.5%, to a smaller drop of 3.7%.
Since consumer spending accounts for over two-thirds of all economic activity in the U.S., the retail sales data is a key indicator of growth. Following large declines in March and April due to the pandemic, retail sales have bounced back rapidly, and the trend continued in August with a solid increase of 0.6% from July. Purchases of clothing and furniture were particularly strong.
The reduced economic activity from previous months has caused a significant decline in inflation. The Consumer Price Index (CPI) is a widely followed monthly inflation report that looks at the price change for goods and services. In August, core CPI was 1.7% higher than a year ago. While this was up from recent levels of just 1.2%, it still was far below the readings of around 2.3% seen during the first few months of the year, prior to the pandemic.
|
 |
