Market Update: Fed leaves rates near zero, pledges support until recovery complete
Quick summary of the Fed’s December meeting:
At their final meeting of the year, the Federal Reserve again voted to leave interest rates unchanged and continued its pledge to support the economy through pandemic-induced pain of the last ten months.
The Fed’s actions leave the Federal Funds rate at or near zero.
Speaking at a news conference following the meeting, Chairman Jerome Powell made clear that the Fed is in no rush to raise rates as the economy struggles with rising infection rates heading into the winter, and that “the next few months are likely to be very challenging.”
The central bank also signaled that it is prepared to maintain its current path for years, and, in the words of Chairman Powell, “deliver powerful support to the economy until the recovery is complete.”
What it could mean for you:
Rates remain at or near historic lows—making now a great time to buy or refi*
The Fed’s bond-buying program is helping keep rates on mortgages low. That makes now a great time to look into refinancing an existing mortgage—or maybe even looking into that ski home you’ve been dreaming of.
A good time to pay down credit card debt?
With economic uncertainty still on the horizon, it’s a good time to shore up your finances. Individuals should make sure to pay down high-cost credit card debt, since rates will most likely be rock-bottom levels for years to come.
Savers still might want to shop around
Savings accounts continue to be a punching bag in the current economic environment, with the average savings account rate at 0.05% or even less at the largest retail banks, so be sure to shop around online to find the best place to park your cash.
* Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Not all applicants will be approved for financing. Applicant subject to credit and underwriting approval. Contact Guaranteed Rate Affinity, LLC. for current rates. Restrictions apply.