The Federal Reserve met this week and as expected, left interest rates alone. Here are some takeaways from this meeting.
- Interest Rates Unchanged: The Federal Reserve maintained the federal funds rate at 4.25%–4.5%, marking the fourth consecutive meeting without a change, reflecting a cautious approach amid economic uncertainty.
- No Immediate Rate Cuts: The Fed emphasized a “wait-and-see” stance, indicating no urgency to cut rates soon, with potential cuts possibly in September, as inflation remains above the 2% target.
- Tariff-Induced Inflation Concerns: The Fed highlighted that tariffs are expected to increase inflation, particularly in goods prices over the summer, complicating rate decisions.
- Economic Outlook and Stagflation Risk: The Fed’s projections show higher inflation and slower growth, noting the risk of stagflation, which could keep rates steady to balance growth and inflation.
- Labor Market Strength: The Fed described the economy and labor market as “solid,” suggesting the current rate level is “modestly restrictive” and not pressing for immediate cuts.
So what does this mean to you? We may not see movement in rates right now, but we are watching key indicators closely. There is still talk of two cuts to rates this year with the first one in September but it will depend on economic indicators over the summer.
If you have questions on this, please feel free to reach out! We can talk about where interest rates are now and see what options you may have to buy a new home or refinance.
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
