The Federal Reserve held rates steady at a range of 5.25-5.5% for the sixth consecutive time at its May meeting, as the U.S. economy continues to show resilience and inflationary pressures. Following the meeting, Marty Green spoke with reporters to discuss how the Fed’s latest decision impacts residential real estate and mortgage markets.
“With inflation data continuing to show a bumpy road toward the Fed’s 2% inflation target, it isn’t surprising that the Fed chose to leave interest rates unchanged and is delaying the prospect of interest rate cuts until later this year,” Green said. The question now is whether inflation proves to be so sticky that the Fed decides that rate cuts in 2024 are no longer in the cards and will instead be delayed into 2025.”
Green added: “Some good news from today’s meeting was the Fed’s announcement that it would adjust the quantitative tightening program to allow less runoff of the Fed’s securities each month commencing in June. Over time, this adjustment should have some positive impact on interest rates without the Fed needing to adjust the Fed funds rate.”
Green’s comments were included in the following coverage:
- Globe St.: Fed Keeps Rates Steady With Cuts Unlikely Until September at the Soonest
- Inman: Rates ease as Fed says it will dial back balance sheet tightening
- National Mortgage News: Chances of 2024 rate cuts dim by the month
- Mortgage Professional America: Real estate, mortgage industry react to Fed’s policy announcement
- Scotsman Guide: Fed holds federal funds rate steady, rules out rate hike in short term