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Fed announcement shocks mortgage rates, is housing next?
Rick Elmendorf discusses the FOMC (Federal Open Market Committee) Statement and what impact it will have on Interest Rates, Housing and the immediate impact for those purchasing or refinancing a home.
The Fed raises the inflation forecast from 2.4% to 3.4%.
Inflation is the arch-enemy of bonds and mortgage rates. This inflation forecast is pushing mortgage rates higher.
Unemployment is expected to come down to 4.5%. Currently 6.1%. More people that have jobs, the more people buy stuff, which lends to inflation.
More Buyers are going to “wait and see”. There will be more renting, more military families settling for base housing, etc.
All in all, the markets are shaken and housing is right around the corner.
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FOMC Statement: https://www.federalreserve.gov/newsevents/pressreleases/monetary20210616a.htm