The Federal Open Market Committee, in a meeting on Tuesday, set a target for the Federal Funds rate of 0 – 0.25%, the lowest rate on record.

This is a sign that the Fed is willing to go to nearly any extent to see that our current economic situation reverses itself.

We’ve reported in the past that the Federal Reserve has a real balancing act to play with regard to the Fed Funds rate; lower it too much and inflation could take off, not enough and the economy won’t turn around. At 0 – 0.25%, it can’t get much lower, so the Fed will no doubt be dealing with inflation issues in the future. This moves signals that they believe stimulating the economy is more important at this point than keeping a check on short term inflation.

What does that mean for mortgage holders? Well, most experts agree that inflation will most certainly be on the rise in the future, and when inflation rises, so do mortgage rates. So, if you’ve been holding off on refinancing into that 30-year fixed for the perfect interest rates, there probably won’t be a better time than now.

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