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
July CPI Eases Mortgage-Rate Risk, But Doesn’t Promise Relief

Consumer inflation rose just 0.1% in July, reducing pressure for a September Fed rate hike as mortgage rates remain near their highest levels of the year

Aug 13, 2026
The Fed Held. The Mortgage Market Got A Warning.

Three policymakers favored an immediate hike, while Warsh welcomed higher bond yields and offered no clear path toward mortgage-rate relief

Jul 30, 2026
New Study Finds UWM's 'All-In' Triggered Industrywide Pricing Spillovers

Research shows wholesale competitors responded to the 2021 Rocket ban by lowering mortgage rates,

Jul 15, 2026
First Major Housing Reform In Decades Becomes Law Without Trump's Signature

Bipartisan ROAD to Housing Act advances supply, construction, and mortgage reforms despite White House protest

Jul 10, 2026
Mortgage Star Conference Honors Women Shaping The Future Of Mortgage Leadership

MWLC honors leaders driving innovation, mentorship, and growth across the mortgage industry

Jul 09, 2026
June Jobs Report Improves Mortgage Rate Outlook

Slower hiring strengthens bonds and eases concerns over additional Fed tightening

Jul 02, 2026