Are More Fed Rate Hikes Ahead this Year?
As expected, the Fed hiked its benchmark Fed Funds Rate by 25 basis points at its meeting last Wednesday.
The Fed has now hiked the Fed Funds Rate eight (8) times since last March, bringing it to a range of 4.5% to 4.75%.
The Fed Funds Rate is the interest rate for overnight borrowing for banks and it is not the same as mortgage rates.
When the Fed hikes the Fed Funds Rate, they are trying to slow the economy and curb inflation.
What’s the bottom line?
In the press conference following the meeting, Fed Chair Jerome Powell acknowledge that inflation has been declining, which he noted was encouraging. However, he said the Fed has more work to do to ensure inflation is on a sustained downward path.
Powell signaled that “a couple” more hikes to the Fed Funds Rate would be appropriate, with the next decision coming at their meeting on March 21-22. He emphasized that the Fed would continue to make their “decisions by meeting, taking into account the totality of incoming data and their implications for the outlook for economic activity and inflation.”
Working with, and putting your confidence in a team that is knowledgeable can make all the difference for your buyers. We are happy to discuss what we see happening as the summer months approach.