[ad_1]
“As the commentary and economic projections suggest, we may be at or near the peak fed funds rate for this cycle,” Fratantoni said. “Inflation is still quite high, but it is slowing. And while the job market is still quite strong, it is weakening, as evidenced by slowing wage growth. Coupled with the advent of much tighter financial conditions after the events of the past couple of weeks, we are anticipating a much slower economy over the next few quarters — which should further bring down inflation per the Fed’s goal.”
Marty Green, principal at Polunsky Beitel Green, hoped the Federal Reserve has not let a good crisis go to waste.
“Teetering confidence in the banking sector, even if currently contained to a small number of banks, offered the Federal Reserve a perfect opportunity to pause without signaling that it was throwing in the towel on inflation,” Green added. “Instead, the Federal Reserve appears to be continuing to dance to last month’s music, not fully aware that the tune is vastly different today.”
Fratantoni noted that homebuyers in 2023 have shown themselves to be quite sensitive to any changes in mortgage rates.
“With this move from the Federal Reserve, MBA is holding to its forecast that mortgage rates are likely to trend down over the course of this year, which should provide support for the purchase market,” he said. “The housing market was the first sector to slow as the result of tighter monetary policy and should be the first to benefit as policymakers slow – and ultimately stop – hiking rates.”
[ad_2]
Source link
