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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“Meeting the market’s expectation, no aspect of monetary policy changed during the first FOMC meeting of 2025. The FOMC sees solid growth, a strong job market, and inflation still above the Fed’s target, indicating that its current target for the federal funds rate is about right, holding back the economy a bit to move inflation down over time. Quantitative tightening continues without changes, with their holdings of Treasuries and MBS continuing to slowly roll off passively.

“With no news in the statement, every word from upcoming speeches will be closely parsed to determine whether this is just a pause before another cut or two or whether this level of the federal funds rate will be the low point for this cycle. MBA is forecasting one additional cut this year.  With the Fed on hold, we do expect that longer-term rates, including mortgage rates, will also stay within a narrow range for the foreseeable future.”