Today marks the start of the next round of FOMC meetings which will conclude tomorrow. Much has been said lately, on both sides of the fence, about whether or not the Fed will leave the Fed Funds rate alone or bump it up by 0.25%. The last time the Fed raised rates was late in December of last year and since then the Fed has stayed on the sidelines, trying to digest the trove of economic data that is released each month. For our takeaway and comments at the conclusion of these meetings, you can click here and register for our MasterClass and hear EquityBuild Finance President and Co-Founder Shaun Cohen tomorrow afternoon following the conclusion and comments.

 

In short, there really has been no clear path for the Fed to act one way or the other. Economic data has been on a see-saw for so long there is no solid data telling the Fed or anyone for that matter that our economy is gaining traction and full steam ahead causing the Fed to start another round of rate increases. One day we’ll get some solid economic news and the next we’ll hear something else that will temper the excitement. For example, just yesterday the National Association of Home Builders announced a stronger than expected sentiment for new housing while today new housing starts fell much lower than expected.

This isn’t necessarily bad news. Real estate investors who are enjoying the low rates we’ve had for quite some time could very well see these low rates continue well into next year. And even at the first rate increase, it’s likely the bump will only be 0.25%, hardly something to cause the economy to come to a screeching halt. Once we see growth approach 3.0% each quarter and non-farm payroll jobs 300,000, then the Fed will have plenty of reason to raise rates. Until then, we’ll probably see more of the same. Stay tuned.