The Gorman Blog

The Federal Reserve kept interest rates near zero on Wednesday and said the economy is improving. But the Fed also pointed out ongoing job losses could dampen a recovery. As a result, the Fed kept its federal funds rate, an overnight lending rate that guides rates on various consumer and business loans, in a range of 0% to 0.25%. Rates have been at that level since December.

The Federal Reserve also said it is slowing the pace of a program to lower mortgage rates and prop up the housing market. It will stretch out its goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae until the end of the first quarter of 2010.

As you may or may not know, Mortgage-Backed Securities (MBS) dictate long term home loan interest rates. When these bonds go up in value, home loan rates conversely go down.