Feds Hold Steady On Rates, No Hints On When Cuts May Occur

By PATRICK LAVERY Predicted by both the experts and projection tools alike, the Federal Open Market Committee on Wednesday decided to maintain its target range for the federal funds rate at 5.25% to 5.5%, the sixth consecutive meeting at which the key rate has gone unchanged following a year and a half’s worth of increases. In prepared remarks, Federal Reserve Chair Jerome Powell echoed previous statements over the past eight months in which he indicated that inflation continues to move too slowly, at least for the Fed’s liking, toward its ultimate goal of 2% to warrant any shift – although according to the data Powell provided, that may be more within reach than previously thought. Total Personal Consumption Expenditures prices…

Rate Watchers To Keep Close Eye On The Fed

By PATRICK LAVERY After a swift acceleration of more than five percentage points in about a year and a half, starting in early 2022, could the Federal Reserve Board keep its policy interest rate in a holding pattern for close to a year? That appears likely, as with no change since last summer, most experts feel the Fed is poised to keep the key rate steady – at a range of 5.25% to 5.5% – when the Federal Open Market Committee emerges from its next two-day summit on Wednesday. CME Group’s FedWatch tool has been a valuable resource for Fed meeting predictions in recent months, and once again, its degree of confidence that the Fed will stand pat this week…

Rates March Toward 7% On Sticky Inflation Data

Mortgage rates are marching towards 7% again as inflationary pressures threaten their stability. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.88%, up from the week prior’s 6.82%. A year ago at this time, the 30-year FRM averaged 6.27%. The 15-year fixed rate increased from 6.06% to 6.16%. A year ago, it averaged 5.54%.  Rates have primarily stuck between 6.5% and sub-7% as they moved up in the first quarter. Freddie Mac Chief Economist Sam Khater noted that rates moved up as inflation stayed sticky and the Central Bank’s monetary policy shifted. “While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different…

Rates Move Down Slightly

Mortgage rates fell last week but remained in the high-6% range. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.79%, down from the week prior’s 6.87%. A year ago at this time, the 30-year FRM averaged 6.32%. The 15-year fixed rate also dropped from 6.21% to 6.11%. A year ago, it averaged 5.56%.  “Mortgage rates moved slightly lower this week, providing a bit more room in the budgets of some prospective homebuyers,” said Sam Khater, Freddie Mac’s Chief Economist.  “We also are seeing encouraging data on existing home sales, which reflects improving inventory. Regardless, rates remain elevated near 7% as markets watch for signs of cooling inflation, hoping that rates will come down further.” Both existing…

Feds Hold Rates Steady As Spring Homebuying Season Begins

By KIMBERLEY HAAS In a move that was not surprising, members of the Federal Open Market Committee held the target range for the federal funds rate steady at 5.25% to 5.5% at their meeting this week. Inflation has eased over the past year but committee members do not believe it will be appropriate to reduce rates until they have gained more confidence inflation is moving sustainably toward 2%, which has been their goal. Federal Reserve Chair Jerome Powell said during a press conference on Wednesday afternoon that inflation may not reach 2% until 2026 but it is likely rates have hit their peak and the committee plans to start dialing them back at some point this year. Powell did not…

Fed Not Likely To Cut Rates Anytime Soon

By PATRICK LAVERY Kicking the can down the road, moving the goalposts – whatever idiom you want to use – such an expression will likely be appropriate for this week’s meeting of the Federal Open Market Committee, which appears poised to hold the target range for the federal funds rate steady at 5.25% to 5.5%. While that margin has not been raised since last summer, there has been hope that at some point in 2024, Federal Reserve Board chairman Jerome Powell will come to the microphone at the conclusion of one of the FOMC’s two-day summits and announce the beginning of a rollback of the series of rate hikes that steadily climbed from near-zero in early 2022 to their current…

Rates Retreat, Giving Refinances A Boost

Mortgage applications increased for a second week as rates retreated from 7%. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — increased by 7.1%, following the week prior’s 9.7% bump. Adjusted purchase applications rose by 5%, while the unadjusted index was up 6% and 11% lower YOY.  “Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” said Mike Fratantoni, MBA’s SVP and Chief Economist.  Nonfarm payrolls rose by 275,000 in February while the…

MBA Responds To Yellen’s Non-Bank Lender Concerns

The Mortgage Bankers Association responded to comments by U.S. Treasury Secretary Janet Yellen who said that independent mortgage banks require regulatory oversight as they navigate commercial real estate debt. In a hearing for the Senate Banking Committee, Yellen said the Financial Stability Oversight Council is focusing on nonbank mortgage companies because they “lack access to deposits, which banks have.” She suggested that financial stress from commercial real estate weakness and low residential refinancing activity could lead to some IMBs failing. “[Non-bank lenders are] reliant on short-term financing that may be a lot less stable than deposits, and in stressful times, their credit lines can be pulled,” Yellen said. “There is concern that in stressful market conditions we could see the…

Mortgage Rates Decline, Reversing One-Week Uptick

Mortgage rates reversed a one-time uptick and fell last week, giving potential buyers even more breathing room. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.63%, down from the week prior’s 6.69%. A year ago at this time, the 30-year FRM averaged 6.09%. Rates have now been largely stable, within the mid-6’s, for almost two months. The 15-year fixed also decreased to 5.94% from 5.96%. A year ago, it averaged 5.14%. “Although affordability continues to impact homeownership, the combination of a solid economy, strong demographics, and lower mortgage rates are setting the stage for a more robust housing market,” said Sam Khater, Freddie Mac’s Chief Economist. Khater noted that expected disinflation should push rates down further…

Powell Responds To Legislative Pressure As Feds Hold Rates Steady

By PATRICK LAVERY Saying the economy has surprised even the experts since the start of the COVID-19 pandemic nearly four years ago, Federal Reserve Board Chairman Jerome Powell on Wednesday announced that the Fed would hold its ground for now and keep its policy interest rate unchanged at its current range of 5.25% to 5.5%. “We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in prepared remarks following the first two-day Federal Open Market Committee meeting of 2024. The decision by the FOMC was not unexpected, and…