On the heels of four straight 75 basis point increases to the Federal Funds rate, the Federal Reserve Open Market Committee increased rates another 50 basis points at its December meeting. According to Marty Green, who follows the Fed’s moves closely, the mortgage market is taking the Federal Reserve’s latest move as a clear indication that the pace of interest rate increases will be moderated going forward, and are hopeful that any increases in 2023 will be in the more typical 25 basis point increments.
“Interestingly, mortgage market participants are still optimistic that interest rates will actually fall in 2023, notwithstanding the Federal Reserve’s stated position that a pivot to a reduction in the Federal Reserve’s overnight lending rate is not on the horizon. The question is whether the market is just being overly optimistic or whether the market actually has a better reading on inflation and the possible effects of a recession than the Federal Reserve does.”
Read Marty’s commentary in the following media outlets:
- National Mortgage Professional: The Fed Hikes Interest Rate 0.5%, Raises Target for ‘23
- Bankrate: What the Fed’s December rate hike means for homebuyers and sellers
- Inman: Fed slows rate hikes, but remains wary of entrenched inflation
- HousingWire: Why mortgage rates are likely to drop as 2023 housing outlook remains gloomy
- National Mortgage News: Mortgage rates drop again after inflation, Fed news
- Mortgage Professional America: Long-term mortgage rate falls again – experts react
- Fortune: What the Fed’s December rate hike means for homebuyers and sellers