FRB: Press Release–FOMC statement and Board discount rate action–August 9, 2005

The Fed does it again. It was surprising to me that they still used the phrase “with robust underlying growth in productivity” since productivity cooled off in the second quarter [Note: Subscription]. However, jobs data improving, it seems more likely that the Fed will continue to raise rates.

However, this doesn’t seem to mean much higher mortgage rates are imminent. The demand for bonds has kept bond prices high and yields low [Note: Subscription] (which most mortgage rates are tied to).

All this ties to real estate through mortgage rates. More on the yield curve to come…



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