Fed Chair Janet Yellen today reiterated her most recent position on interest rates for the near term. During her second public pronouncement as Fed Chairman, Yellen stated yet again that the Fed will be accommodating to the economy as it relates to raising interest rates, something that she said fed chair yellentwo weeks ago just days after setting a specific timetable of six months after the end of QEII. It appears that this time she really means it.

 Reinforcing her comments should leave little doubt that an inevitable rate increase early next year is nowhere near set in stone and was perhaps taken out of context although it’s pretty hard to take a comment such as that out of context. So instead she repeated the “correction” once again. Yellen said, “I hope it’s completely clear that while monetary policy is very accommodating at this point, and I focused on the need to keep it so or to adjust it to make sure the recovery remains on track. As the recovery proceeds and healing occurs, it’s obvious that we will need to tighten monetary policy to avoid overshooting our target.” “Overshooting” means waiting too long before raising the Fed Funds rate.

Real estate investors who are planning on financing a new construction project should find construction loan rates to remain low into next year and buyers should also have relatively low rates during that same period. Lower rates mean more qualified buyers so real estate investors should be able to sell a property for more compared to trying to sell a home to fewer potential buyers.

The only real major impact that could change the Fed’s dovish behavior is events in Ukraine. Should Russia decide that it’s time to officially step across Ukrainian’s borders, all bets are off and mortgage bonds and Treasuries alike would benefit to a great degree, helping to dampen interest rates for all types of borrowing.