Fed met this week……….

The Fed met this week and released their statement Wednesday. They left interest rates alone but did make some comments that affected interest rates.

In March, the Fed said they didn’t expect any interest rates increases until at least 2024. This week, they changed that and said interest rate increases could come as soon as 2023, some of the members expect to see two interest rate hikes in 2023.

The Fed also raised it’s headline inflation expectation to 3.4%, a full percentage point higher than the March projection. They did continue to say that the inflation pressures are transitory.

None of this was what the market expected. The Fed was expected to let interest rates stay where they are for a couple more years – as soon as this was released interest rates jumped and the stock market dropped. Fed Chairman Powell did confirm in a post meeting press conference that the board did talk about the next steps in tapering the Fed’s bond buying programs. These programs affect mortgage interest rates a lot. By the time he made that announcement, the damage was done as the markets assumed the Fed officials discussed slowing the purchase of bonds.

In the bigger picture, this is a token adjustment – last week the bond market was very strong. It remains to be seen whether today is the beginning of a trend towards higher rates or not – we won’t know that answer until we see how the markets react over the next few days. Many think it will be this fall before the Fed has enough information about the economy to make bigger decisions.

So if you are looking at buying or refinancing, know that the bond market may be a bit jumpy for the next few days. The market could continue increasing or maybe it’s a short term reaction. We won’t know until we see what happens over the next week. Know that rates are still good – but maybe a bit higher than they were a week or so ago!

Leslie Vanderwerf,  NMLS ID#335509, Cross Country Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website

 

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

Related Posts

Weekly real estate market update 2/14/25… record percent of buyers plan to move this year

🖨 Print Article Showing activity is in a slump compared to the last three years… not sure if it is because of the SuperBowl last weekend or the cold snap...

Cost vs Value 2024… best home improvements for resale value

🖨 Print Article In the 2025 Outlook for Home Remodeling, Carlos Martin, Director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, explains: “. . . homeowners...

Subscribe to Our Newsletter for Market Updates & Mid-Century Modern Listings

Our weekly HomesMSP Update includes current local market information and a curated list of mid-century modern properties for sale, plus posts from an inspector, a lender, a stager, info about neighborhoods, life in the Twin Cities… even recipes!

This field is hidden when viewing the form

Blog Categories

Archives

Sharon and John Hensrud

About Us

The HomesMSP Team is committed to meeting you where you are and listening… really listening to understand you so we can use our extensive knowledge of the market and local neighborhoods to give you personalized service.