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’s projections showed a weaker outlook for economic growth and the job market but somewhat higher inflation for the near term compared to their forecasts in December. The statement indicates more concern about weaker economic growth, but its outlook for the federal funds target is unchanged, and it made no change to the rate target at this meeting. The FOMC is holding steady amidst substantial uncertainty regarding the outlook.

 "The most significant change to policy at this meeting was a decision to markedly slow the pace of quantitative tightening (QT) beginning in April, dropping the pace of Treasury runoff from $25 billion to $5 billion per month. The MBS cap of $35 billion per month remains the same. A slower pace of QT will prevent further liquidity strains in financial markets.

“In the near term, we expect mortgage rates to remain in a fairly narrow range, between 6.5 and 7%, which should support the spring housing market.”