The Federal Reserve’s FOMC meeting came out as most expected: an announcement that they will not raise the Fed Funds rates. However the news also came out that most Fed Presidents feel that there will only be 1 rate hike this year, as opposed to the 3 that were expected last December.

This news was a relief to the markets. The consumer price index for May was tame at up .2%. The weekly jobless claims were also neutral news, retail sales were flat (up .4% ex auto up .4%). This was all neutral news.

The next Big Thing that could rock the markets is the UK’s vote next Thursday the 23rd on whether to exit the EU. If they exit, this could cause turmoil in the EU’s economy and uncertainty, even “across the pond” tends to create a flight to quality = US treasuries. This would mean rates go down. If they decide to stay as part of the EU, then rates will remain the same.

The good news is that we offer a float down, so if rates do drop like a rock all of sudden, we will be able to lower the rates of those who are already locked, fully approved, but not yet funded. Stay tuned…