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The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

It also reiterated plans to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the U.S. economy is “leveling off” and that financial markets continue to improve.

The change in verbiage is the rosiest from the Fed since the start of the recession and it may signal that the downturn’s end is near.

That said, the Fed highlighted lingering economic soft spots that could still impact a recovery through the end of 2009 and into 2010.

1. Ongoing job losses
2. Reduced “housing wealth”
3. Tight credit conditions

Furthermore, rising energy costs remain a threat to inflation.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to honor its $1.25 trillion commitment to the mortgage bond market.

Market reaction to the Fed’s press release is muted.  With no real change in message and a basic confirmation of what most investors already knew, Wall Street sees no reason to panic.  Mortgage rates are unchanged.

The Fed’s statement is another of a growing list of indicators that while we may have hit the bottom of our economic issues, they are not yet over. However, from my vantage point as a layman, it seems to me that real estate might once again see signs of the recovery before the entire economy does. Just as we were the first sector of the economy impacted by the economic woes, we might just be one of the first sectors to feel the benefits of the recovery. Sort of a “first in, first out” scenario. Of course, I temper that by

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reminding the reader that I am no economic expert, and my guesses are as invalid as any of yours.

The FOMC’s next scheduled meeting is September 22-23, 2009.