Keeping financing costs low for real estate investors while the housing market is on a steady roll is an investor’s dream, one that we’ve all been experiencing for some time now.

The Fed did in fact bump rates last December butTarget Inflation Rate have had their hands somewhat tied since then as conflicting economic data hasn’t been giving a clear signal about when and if the next rate increase will be. Fed Chair Yellen spoke to Congress this week and essentially said the Fed is monitoring economic progress and will act appropriately yet that is basically saying very little. One thing the Fed does want to see is a dose of inflation, something closer to the 2.0% mark. And we might be getting there. Maybe.

 The Producer Price Index was released today, prices on the wholesale level, and wholesale prices fell slightly once again, this time down by -0.1%, following a -0.2% drop in February. Consumer Prices will be released tomorrow but for February but over the past 12 months, consumer inflation has risen by 1.7% getting very close to the Fed target. However, a few Fed governors are in the minority at this stage regarding any rate increase.*

 Fed governor John Williams of San Francisco said yesterday he feels the economy is moving along quite well but it’s the foreign economies that could hold us back. And that’s another conundrum. We here in the States could be enjoying decent job growth and modest inflation yet if economies elsewhere falter then so too will our exports and the jobs that come with them. It seems it’s been forever that while we’ve always had some sort of symbiotic economic relationship with other countries, the world economy today is so intertwined that as one major market begins to slip it will soon have a negative effect on others. As far as interest rates are concerned, it looks like real estate investors will enjoy this ride for quite some time.

* "Fed Officials Tout Strong Economy" April 13, 2016