FOMC Keeps Federal Funds Rate Low

Posted by Orb Staff on December 17, 2009 No Comments
Categories : Residential Mortgage

Noting ‘some signs of improvement’ in the housing sector and financial market conditions that have become ‘more supportive of economic growth,’ the Federal Open Market Committee (FOMC) has voted to maintain the current target range for the federal funds rate at 0% to 0.25%.

The FOMC also revealed some of its exit strategy relating to the Federal Reserve's special liquidity facilities. Most of the facilities – including the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility and the Term Securities Lending Facility – are still set to expire on Feb. 1, 2010, as the Fed announced in June.

The FOMC said the Fed will work with its central bank counterparties to close its temporary liquidity swap arrangements by Feb. 1, as well. The Term Auction Facility will continue to be scaled back early next year.

The Term Asset-Backed Loan Facility, meanwhile, will keep its previously announced expiration dates (June 30, 2010 for loans backed by new-issue commercial mortgage-backed securities; March 31 for loans backed by all other collateral types).

SOURCE: Federal Open Markets Committee

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