Federal Reserve signals it won't raise interest rates at all this year

HousingWire

At the conclusion of its March meeting, the Federal Reserve announced it is not raising the federal funds rate. In fact, the Fed is signaling it is done with the idea of rate hikes for the rest of 2019.

The Federal Open Market Committee’s statement indicated that the Fed is taking a cautious tone with the rates as it monitors the rate of inflation and other global economic conditions and developments.

 “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” The FOMC statement said.

The committee said it will maintain its target range for the federal funds rate at 2.25-2.5%. For the most part, everyone thinks this is a good move. Therefore, is an interest rate cut the next step?

This sentiment echoes the FOMC’s earlier statements from its January meeting earlier this year.

The FOMC statement explains that the Fed has looked at recent indicators pointing to slower growth in the first quarter of the year.

Mike Fratantoni, the Mortgage Bankers Association’s chief economist, said it appears the Fed is done raising rates.

“As expected, the Federal Reserve left short-term rates unchanged at their March meeting,” he said. “The job market is quite strong, and even though wage growth has accelerated, inflation has not picked up and shows no signs of doing so. With that combination, Fed officials are comfortable leaving rates at their current level. If inflation were to increase, they might be forced to hike again, but it appears that we are at the end of the rate hiking cycle.

Courtesy Caroline Basile, HousingWire newsletter.