FOMC Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni’s commentary following the Federal Reserve’s FOMC statement released this afternoon on monetary policy and the economy:

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“The FOMC held rates steady as forecasters had expected. The news from this meeting came from the FOMC’s projections regarding the direction of the economy. As noted in its statement, while inflation has eased, it remains ‘elevated,’ so policy must remain restrictive for now to bring inflation down further. The FOMC projections show a faster pace of rate cuts in 2024.  While the projections don’t show much of a change in the committee’s expectations regarding economic growth or the job market, they do recognize the faster pace at which inflation has declined in 2023 and see further slowing back to the 2 percent target.

“Additional rate hikes no longer appear to be part of the conversation. It is all about the pace of cuts from here. This is good news for the housing and mortgage markets. We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.”