September 27, 2022
Well, the Federal Reserve raised short-term rates by 0.75%. This was not a surprise, as predictions for a 0.75% increase had been circulating for more than a month. And there were so many speeches and statements by Fed members delivering tough talk about how they were going to stay the course against inflation – even if this meant slowing down the economy significantly.
And even though last week we indicated that the time for talk was over, we really did not expect the Fed to stop talking after taking this action. As a matter of fact, since the action was not a surprise, the statement delivered after the meeting was of more interest to market analysts than the activity. Of course, the Fed delivered by confirming that inflation will stay in their cross hairs for the foreseeable future. To this end, we have an important question.
What happens when we see solid evidence of a slowdown? The real estate sector has already seen a significant slowdown, but this was following a period in which the market was red-hot. The inflation readings of the past two months have shown inflation is moderating, but not as much as expected. The job market and consumer spending have continued to bolster growth. But what happens if these indicators also turn? Will the Fed keep the pressure on? By raising rates so quickly, this gives the Fed breathing room to provide stimulus in the future if it is needed. Meanwhile, the jobs report next week should give us a clue regarding how the last hot sector of the economy is holding up
Source: Origination Pro
Executive Vice President, Benny Loria
Benny Loria, Esq. 718-943-9200 Ext. 115
Benny Loria is a co-founder of AMERIMUTUAL Mortgage and Executive Vice President. Like his brother Philip, Benny is also an attorney and has extensive knowledge of New York’s real estate market.
Benny is responsible for managing the firm’s commercial and residential sectors. Over his career, Benny has developed deep and lasting relationships with a broad array of lenders, which in turn leads to an extensive array of mortgage products for his clients.
Benny is responsible for day-to-day management of the firm’s relationships with its most active lenders and management of AMERIMUTUAL’S Loan officers and Processors