Economic Tea Leaves
The quarterly meetings of the Federal Reserve’s Federal Open Market Committee are followed closely by the financial media. Dozens are stories quote experts anticipating what they will do go interest rates before they meet, and hundreds are written afterwards, reporting and interpreting what the committee did. Experts after experts pore over the Fed’s tea leaves to read meaning into every move—and non-move—when the FOMC meets.
Yet somehow the FOMC’s decision last week to leave the federal funds rate unchanged (which NAR thinks was the right move) didn’t create the kind of stir on the news pages and the talk shows that one might have expected, especially when you consider that it was the first time the Fed had not raised rates in more than two years. Seventeen straight times the FOMC decided to raise rates.
“Many analysts predicted the pause in rates will be short-lived as Fed policy-makers confront continued inflation pressures,” reported one news service. That may be the case, but the fact is that at least for now the relentless upward pressure on rates has eased and the vital housing economy can breathe a sigh of relief.
We’d prefer to believe the governors paid attention to the impact rate hikes where having on housing and decided—at least for now—to give America’s homebuyers and sellers a chance to recover.
