bright light

The Federal Reserve in the United States announced that they would not raise interest rates, which may give fixed mortgages the boost they needed. The availability of fixed mortgages has been down and the rates have been too high for many. Experts are waiting to see if this news will result in more fixed mortgages becoming available.

“Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased,” the Fed stated in their release.

 “While the (Fed) sees greater upside risk to inflation than it has previously, it stopped far short of signaling a timetable or even a commitment for a rate hike,” Citigroup economist Robert DiClemente said in a note to clients. “We see policy settling into a watchful, waiting mode, perhaps considerably longer than markets expect.”

Despite this, there is still word that European banks will raise rates. Jean-Claude Trichet, the president of the European Central Bank stated,  “I said we could decide to move our rates by a small amount in our next meeting in order to secure this solid anchoring of inflation expectations. I said it’s possible. I didn’t say that we would envisage a series of increases. I didn’t say that. That being said … of course we never pre-commit. The observers, the market, know that pretty well.”

Related reading: Fixed Mortgage