The Fed recently announced short term interest rates will stay put near zero. The board will be “patient” and rates will remain low “for a considerable time.” Chair Janet Yellen confirmed no change in the first quarter of 2015. Many economists believe interest may edge up to more normal levels in ¼% increments starting mid-2015.
The board also disclosed that criteria affecting rate hikes are employment and inflation. The number of jobs grew substantially in 2014; however, plummeting oil prices sent the Consumer Price Index down .3% in November and raised the concern of deflation, as concerning as its counterpart. The Fed categorized the impact as “transitory,” expecting job numbers to grow and oil prices to stabilize.
Even so, keep an eye on oil. Cheap gas puts more disposable income into consumers’ pockets and raises the potential for a larger loan/home purchase. Also dropping oil prices could undermine global markets keeping interest rates down even longer.
For information how Fed policy and the price of oil can translate into greater sales for you in 2015, please call Mike at 1 (800) 239 1103 or email Mike@mycahomeloan.com.
