Would Buyers Benefit If Fed Pauses Rate Hikes? | #InterestRateHikePause #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991


Would Buyers Benefit If Fed Pauses Rate Hikes? | Realtor Magazine

Following a series of interest rate hikes, the Federal Reserve may be ready to hit the pause button—which could be welcome news for mortgage borrowers. Notes from the Fed’s latest meeting show a consensus among board members not to raise the benchmark interest rate at the body’s January meeting or its next meeting in mid-March. However, Fed officials did say they expect economic growth to remain strong enough to still support a rate increase sometime in 2019. The Fed’s benchmark interest rate does not directly impact mortgage rates, but it usually influences the direction mortgage rates go.


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At a December news conference, Fed Chairman Jerome H. Powell said the economy remained strong, and the Fed expected to continue to raise rates in 2019. But upset investors had driven down asset prices and prompted a market slump. The Fed has since lightened its tone and has emphasized that it’s taking note of investors’ concerns.

According to the Fed’s meeting notes: “Participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier.” The Fed’s tone still remained upbeat about low unemployment and consumer spending. Charles Evans, president of the Federal Reserve Bank of Chicago, predicts “another good year in 2019” for the economy.

However, a government shutdown and tensions between the U.S. and China are igniting some concerns. “If the pessimism evident in financial markets eventually shows through to economic outcomes, there would be less need (and perhaps no need) for further increases in interest rates,” says Eric Rosengren, president of the Federal Reserve Bank of Boston. “However, my current expectation is that the more optimistic view will prevail.”


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