Fed Leaves Interest Rates Untouched, Consumers Keep the Status Quo The Federal Reserve announced Wednesday that it would leave interest rates unchanged -- for now. For consumers, that means something of a holding pattern for the near term, with little impact on borrowing. By end of summer, that could be different.

"Inflation appears to have leveled over the last couple of weeks, and the present state of the economy is pretty soft at the moment," Keith Gumbinger, vice president of mortgage research firm HSH, told DailyFinance. "But I expect it to show somewhat more signs of life as the summer progresses, and rates will start to nudge up as a result."

With ongoing low interest rates, are you planning to refinance your home?
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The Federal Funds Rate, the overnight rate the government offers for short-term loans to major financial institutions, remains unchanged at between zero and 0.25%, where it has been since December 2008. Any change in the Fed Funds Rate would have an immediate effect on the prime rate, which banks charge large corporations for short-term loans, which in turn impacts consumer mortgage borrowing and other major financing rates.

For potential home buyers, this is good news. Home loan interest rates will stay low in the near future. "Mortgage rates are quite fantastic right now, and unlikely to remain there in perpetuity," Gumbinger said. "It's a good time to make a move for a purchase or refinance, if you can." (Read also Renting Versus Buying)

"The consumer will really see no change in their situation from the Fed's announcement, which was well anticipated," Brad Sorensen, director of market and sector analysis for Charles Schwab, told DailyFinance. "Unfortunately, savings rates will continue to be extremely low, but mortgage rates should also stay relatively low."

Credit card holders are unlikely to face interest rate hikes soon either, according to CreditCards.com. The majority of cards and offers are for variable interest rates based on the prime rate, which has not changed.

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Rates have definitely helped keep real estate afloat. However, the real problems are unemployment, uncertainty, confidence in the economy, and tight mortgage lending standards.


July 17 2013 at 2:06 PM Report abuse rate up rate down Reply

The Fed needs to be audited and ended...yesterday!

June 25 2011 at 4:08 PM Report abuse +3 rate up rate down Reply


June 23 2011 at 3:48 PM Report abuse +3 rate up rate down Reply

please, someone, somewhere, demand that The Fed be audited. stop them from printing and diluting our dollar. let the free market decide interest rates! why is no one outraged about the low interest on savings? does no one have savings anymore?

June 23 2011 at 10:07 AM Report abuse +3 rate up rate down Reply

The reason the Fed is keeping interest rates low is so that people with savings might be duped into putting their money into that big Casino/Ponzi Scheme known as the Stock Market so that the idiots in Wall Street can get richer while the average saver is drained of his or her wealth since the stock market is so unreliable. Also, even though the interest rates are low, the banks are unwilling to loan money to people to buy houses or small businesses. Basically you can only buy a house with cash, so what good does having a low interest rate do for anyone! Same thing with a business - our veterinarian passed away last year so the family is trying to sell the practice but no bank will loan the prospective new veterinarians any money. I say it's time the Feds raise the interest rates so people can make some decent money on their savings and that way they can save up to buy houses and businesses.

June 23 2011 at 2:20 AM Report abuse +4 rate up rate down Reply
1 reply to nyland7's comment

Maybe "YOU can only buy a house with cash", but EVERYBODY ELSE finances home purchases with a mortgage. Nearly every transaction in the housing market is financed by debt.

June 23 2011 at 10:52 AM Report abuse -2 rate up rate down Reply

What the feds don't realize is by keeping the interest rates so low, they are losing a lot of tax dollars. Plenty of senior citizens with saving accounts are not getting any taxable interest. Lower income means lowers income taxes. Bunch of dummy's in washington .d.C.

June 23 2011 at 2:05 AM Report abuse +2 rate up rate down Reply
2 replies to marilyn's comment

they are dummies in Washington and we are pay them six figures with full benefits while they wreck the economy and legislate everything for us while exempting themselves...why????

June 23 2011 at 10:09 AM Report abuse +2 rate up rate down Reply

Do you really think higher income taxes as a result of higher interest rates creating more interest income would offset the higher interest paid by the Treasury on its $14 trillion debt? If so, you might want to refrain from referring to others as "dummy's" (sic).

June 23 2011 at 10:55 AM Report abuse -1 rate up rate down Reply
Samir semaan

What happen to stock market is the limit of what is now 12000 points for Dow Jones and that because the housing is not fixed and the final foreclosures of the market is taking place right now but the principles of economic is strong but unemployment has raised a notch and the reality is unemployment is high. Let us see how unemployment fare in the month of june and will move from there. Is that a bump on the road or it has been infested in the american economy as slow recovery time will tell.

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