Home loans rates face divergent interest rates outlook

At the Bank of Japan monthly monetary policy meeting the BOJ kept policy unchanged although there had been speculation earlier in the week that they could indicate a willingness to scrap their quantitative easing policy in which they flood the banking system with cash and keep rates near to zero.

The BOJ are now expected to keep short-term rates pinned near zero until at least late this year.

Closer to home The Bank of England announces its policy decision today at noon following its monthly rate-setting meeting. It is widely expected that rates will remain on hold at 4.5 percent for the sixth month in a row.

Ex Fed Chairman Alan Greenspan made the news last night just a week after leaving the Federal Reserve. He made some upbeat remarks on the U.S economy at several private events. According to one source, Greenspan suggested that the low level of long-term bond yields may mean official interest rates would have to go higher than they otherwise would to slow the economy.

Some market watchers were surprised he would discuss the economy so soon after leaving the central bank. Interest rate futures dropped and the dollar firmed after the reports of his comments circulated in the markets.

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