Market Update: Federal Reserve says no rate hikes in 2019
Fed leaves rates unchanged due to slow economic growth
As expected, the Federal Reserve announced Wednesday that rates will remain unchanged in 2019 and there are no projected rate hikes this year. The Fed acknowledged that economic “growth has slowed.” Overall, the Fed expects lower economic growth in 2019, decreasing its forecast to a 2.1 percent growth in Gross Domestic Product. The U.S. economy has been averaging 3.0%. The Fed also reported that the labor market remains strong, but noted that household spending and business investment has decreased.
What this news means
The Fed announcement is friendly news for the bond market, as mortgage-backed securities are rallying on the news while rates are falling. The yield on the 10-year note has traded down to its lowest point of the year with significant resistance at 2.55%.
Jeremy Collett is Guaranteed Rate’s Executive Director of Capital Markets. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.