Fed Announces Modest Rate Hike – NMP Skip to main content

Fed Announces Modest Rate Hike

Dec 16, 2015

In what might be the anti-climactic announcement of the year, the Federal Reserve has reversed its long-running policy of maintaining near-zero rates by announcing a mild rate hike.

In a unanimous vote by central bank’s Federal Open Market Committee (FOMC), the Fed considered the state of economic growth and labor market participation to warrant a rate increase.

“Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent,” said the FOMC in a statement issued this afternoon.

Nonetheless, the FOMC insisted that it was too soon for the Fed to fully disconnect its effort to help keep the economy humming.

“The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way,” the FOMC added. “This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.”

In a press conference following the issuance of the FOMC statement, Federal Reserve Chairwoman Janet Yellen insisted that further rate activity was "likely to rise only gradually over time," acknowledging that economic weak points including dismal wage growth continue to prevent the central bank from pursuing more vigorous rate hikes.

About the author
Published
Dec 16, 2015
Better's Mortgage Volume Rises 15%, But Losses Persist

Better is targeting a bigger share of wholesale lending, with plans to expand into Non-QM and conventional mortgages

Nov 10, 2026
Strong Jobs Report Threatens Mortgage Rate Rally

October hiring more than doubled expectations, pushing Treasury yields higher

Nov 06, 2026
Fed Holds Rates, But Pricing Pressures Persist

Rising Treasury yields and fresh inflation data complicate rate locks, borrower qualification, and lender margins as markets anticipate another hike in December

Oct 29, 2026
Zippy Adds Capital For Manufactured-Home Lending Push

The $20 million investment from Saluda Grade will support expansion beyond 27 states and new loan products across wholesale, retail, and community channels

Oct 16, 2026
Inflation Hits 3.7%, Putting Mortgage Rate Relief At Risk

September’s inflation pickup puts recent rate improvements at risk, potentially eroding affordability gains from lower home prices and seller concessions

Oct 14, 2026
PLACE Acquires Ardley, Expanding Push To Turn Existing Borrowers Into New Loans

The latest deal connects borrower retention technology with Maxwell's origination platform and PLACE's real estate network, creating new opportunities for lenders

Oct 09, 2026