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After the Fed minutes were released, Treasury yields fell to their lowest level in months. (iStock)
The Federal Reserve released its minutes on Wednesday, showing more and more talk about when to remove its economic stimulus, pushing down interest rates and the stock market.
The Fed decided at the June meeting to keep the fed funds rate within a target range of 0% to 0.25%. But meeting minutes showed members of the Federal Open Markets Committee are increasingly debating when the federal stimulus should end.
And while the minutes also made it clear that the Fed would provide plenty of warnings before taking action, that discussion was enough to keep investors away from their bets on economic recovery and rising inflation.
The federal funds rate indirectly affects the interest rates on various types of loans, including mortgages, student loans, personal loans, and credit cards. As the Fed has kept interest rates at record highs, loans have increased with the purchase of mortgages and refinances have reached historic highs. If you are looking to lower your interest rate, check out Credible to see your mortgage refinancing options before interest rates rise.
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As investors shifted direction, interest rates hit their lowest level since the winter, according to Freddie Mac’s latest primary mortgage market survey. The 30-year fixed-rate mortgage fell to 2.9%, the lowest level since mid-February.
“Mortgage rates have fallen this week following falling US Treasury yields,” said Sam Khater, chief economist at Freddie Mac. “While mortgage rates tend to closely track Treasury yields, other factors may have an impact, such as labor markets, which continue to improve according to last week’s jobs report . have the opportunity to take advantage of the 30-year rates which should continue to hover around 3%.
Interest rates could be on the verge of going up, especially if the Fed talks about abandoning bond buying continue. A pullback from this would not only be the first step in moving away from the Fed-induced stimulus measures that were put in place during the pandemic, but would also foreshadow that an interest rate hike was on the way. ‘horizon. But for now, rates remain at historically low levels.
Want to take advantage of today’s low interest rates to lower your monthly mortgage payments? You can visit Credible to see your mortgage interest rate from several mortgage lenders at the same time.
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Other factors are also helping to push Treasury yields to their lowest level since February. For example, the latest jobs report shows unemployment edged up from 5.8% to 5.9% in June, deviating from the expected decline of 5.6%, according to the last report of the Bureau of Labor Statistics.
Currently, the 10-year Treasury yield has fallen to 1.3%, its lowest level since February and a surprise to investors who thought this year’s economic recovery would encourage rate adjustments to higher interest rates. high. These low rates also affect markets such as student loans. Student loan refinances are on the rise as borrowers seek to lower their rates and monthly payments. If you are looking to refinance your student loans, you can visit Credible to compare several loan options immediately and get prequalified in minutes without affecting your credit score.
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