Wednesday, July 26, 2023 / by Fahad Karamat
In the intricate web of economics, the Federal Reserve (often called "the Fed") stands as a formidable entity, casting its influence far and wide. For real estate enthusiasts, understanding the Fed's operations is crucial in grasping the underpinnings of the housing market's ebb and flow.
The Central Banking Behemoth
As the country's central bank, the Federal Reserve's primary mandate encompasses fostering financial stability, curbing inflation, and championing maximum employment. Integral to this mandate is the regulation of interest rates, a mechanism by which the Fed deftly directs the trajectory of the US economy.
The Federal Open Market Committee (FOMC) - The Decision Makers
Nestled within the Federal Reserve is the FOMC, the nerve center of decision-making. Assembled eight times annually, the FOMC meticulously assesses economic indicators to plot the course of the nation's monetary policy. The committee's eclectic mix of members, ranging from the Board of Governors . ...
Wednesday, June 14, 2023 / by Fahad Karamat
In an unforeseen twist, the Federal Reserve has decided to hold its benchmark interest rate, offering borrowers nationwide a temporary sigh of relief. Yet, with future rate hikes looming, how should we interpret this decision?
Taking a Breather Amidst the Rate Hike Marathon
Over the past months, the Federal Reserve has been on a rate-hike spree to address the rampant inflation concerns. Their recent choice to maintain the rate at 5.1% has made some market observers raise an eyebrow. This hiatus might be the Fed's strategy to assess the long-term effects of their prior rate hikes.
Reading Between the Lines
Chairman Jerome Powell's commitment to mitigating inflation is evident. However, his cautious approach indicates that there's still uncertainty surrounding the broader economic trajectory. The balance is indeed fragile: combating inflation without denting the growth momentum.
A Mixed Bag of Predictions
Despite the hawkish hint at two potential rate hikes,. ...
Wednesday, April 12, 2023 / by Fahad Karamat
When it comes to U.S. inflation, it's not all about the Benjamins. Sometimes, it's about the eggs! Recent data paints a brighter picture of U.S. inflation, with egg prices playing a significant role. But will the Federal Reserve whisk things up with another interest rate hike?
A Dive into the Numbers
As they say, numbers never lie, and in March, the story they tell is one of cooling down. U.S. inflation saw its lowest level in nearly two years, with the consumer-price index ticking up by only 5% year-over-year. A welcome change, considering February's 6% ascent. This moderation was fueled by drops in grocery, gasoline, medical care, and utility costs, though frequent fliers and insurance hunters might still be feeling the pinch with high prices.
Peeling Back Layers: The Core Inflation Narrative
Strip away the volatile food and energy prices and you get core inflation. At 5.6% YoY in March, it's a subtle nudge up from February's 5.5%. Shelter costs are the main culprits behind; ...