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What will 2011 bring to home equity loans?

[Dec 31, 2010.]

 

Regularly, the voting members of the Federal Reserve's monetary policy making committee, the Federal Open Market Committee (FOMC), rotate and change. In 2011 there will be four members coming in who could change the voting numbers enough to sway the interest rate policies that effect mortgage rates. Going out is one who has been a strong and often lone voice of dissent against quantitative easing.


Coming in:



  • Charles I. Plosser, 62, is President of the Federal Reserve Bank of Philadelphia. He does not believe that monetary policy can make the recovery faster. He thinks that it is crucial the Fed not be behind the curve in preventing runaway inflation. He is likely to be a dissenting vote against Chairman Bernanke's current monetary policy.

  • Richard W. Fisher, 62, President of the Federal Reserve Bank of Dallas, is another potential dissenter. He believes fixing the economy is in the hands of the fiscal and regulatory authorities, not the Fed.

  • Narayana R. Kocherlakota, 47, is President of the Federal Reserve Bank of Minneapolis. He only gained this position last year, and so will be voting for the first time. Having less experience, he tends to walk a more middle ground. While he does advocate quantitative easing but expects its effects to be modest.

  • Charles L. Evans, 52, is President of the Federal Reserve Bank of Chicago. He is the most like Chairman Bernanke in his thinking. He is mostly worried about chronic unemployment and deflation. He will very likely vote with the Chairman.


Going Out:



  • Thomas M. Hoenig, President of the Federal Reserve Bank of Kansas City, has been a loud voice against current monetary polciy. His vote was dissenting eight times this year. He will not have a vote in 2011.


The Federal Reserve is currently overseeing a $600 billion purchase program that buys securities, artificially keeping interest rates that effect mortgages low. If the balance of the discussion around the FOMCs table tips in the direction of change, mortgage interest rates on home equity loans could go up in 2011. Analysts are mixed on how much impact these new members will have. Ultimately, the Chairman has a significant amount of power to wield for his current monetary policy.


Get more information about home equity loans, now.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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