The Federal Reserve has been buying $120 billion worth of Mortgage Bonds and Treasuries each month in an effort to keep interest rates low. Lower rates often promote borrowing and stimulate the economy. These purchases have greatly influenced interest rates lower over the past year and a half.
At their last meeting on November 3rd, the Fed announced they will start to taper or reduce those purchases each month. And because the Fed will be purchasing less, there is a potential risk that interest rates may not stay as low in the coming months. Additionally, recent fears of rising inflation may nudge interest rates higher.
Currently, interest rates are still extremely attractive. If you are considering purchasing a home or refinancing your current mortgage, now may present a good opportunity to do so.
