The federal reserve held stable interest rates at its meeting on Wednesday and did not disclose calendar to lower them. (action))
The Federal Reserve is Keep the rates In its targeted range of 4% to 4.25% and waits to see how the prices of the administration of President Donald Trump will have an impact on the economy.
For the moment, the president of the federal reserve, Jerome Powell, said that the central bank was in the right place to monitor the impact rates on the economy before making a decision on additional reductions in interest rates. For the moment, the mandate remains the same: obtaining inflation at a target rate of 2%. The decision even comes with a Negative GDP in the first trimester By reading. American GDP has decreased at an annual rate of 0.3%. It was the first quarter of negative GDP growth since the first quarter of 2022.
“While the gross domestic product recorded a slight decrease in the first quarter, which aroused concerns about a recession, wider economic data highlight continuous resilience”, the new vice-president of the research of the National Association Association, George Ratiu, said in a press release. “The main risk for economic activity is to continue the financial pressure on households from higher monthly invoices, combined with the imminent threat of the increase in layoffs.”
The Fed had planned two interest rate drops for this year, but the impact of how President Trump's prices will take place derailed this plan. Powell said the Fed is in good place to think about policy rates to respond quickly and potential developments, including rate cuts or keep them stable.
“Despite increased uncertainty, the economy is still in a solid position,” said Powell During a press conference Wednesday. “The unemployment rate remains low and the labor market is almost a maximum job.
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Mortgage rates will not move in time for the purchase of a summer house
According to Ratitu, without reduction of rate in view, the affordability of the accommodation will remain a central challenge for most Americans, whether they are looking to buy or rent.
Mortgage rates should remain in the 6% high range that they have held in the last six months without action by the Fed. House prices are around 50% higher than in 2019.
“The best case for mortgage rates is to hover just over the 6% mark for the next two years,” said Victor Kuznetsov, co-founder of the asset management of the Imperial Fund and Managing Director. “The average American household has adopted an expected strategy concerning mortgage rates, as they also seek to reduce their monthly consumption expenses in a case of current economic uncertainty.
“The good news is that the employment and prices of houses remain strong, so families will be better placed to buy or refinance a house in the coming months, especially if the rates are less than 6%,” continued Kuznetsov.
Mortgage rates should remain stable on the summer housing market. The Deathgage Bankers Association provides that the Fed will resume reduction of short -term rates to the second half of the year. “Before the fall, if inflation cools as expected, mortgage rates will start to drop slowly and regularly, finishing 2025 approximately 6%,” said Voxtur CEO Ryan Marshall.
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The loan resumes despite higher rates
Some buyers are not waiting for the drop in interest rates, and loans have recently resumed while consumers readjust their prospects and expectations, according to Michele Randeri, vice-president of transunion and chief research and council in the United States.
“Although the possibility still exists for potential rate reductions later this year, the economic image is complicated, and it is too early to know if or when these cuts could occur,” said Randeri. “We are starting to see positive signs in loans – mortgages, home loans and automotive financing show signs of life after a few slow years.
“However, these earnings will probably remain progressive until the rates start to drop, because many borrowers hesitate to contract a loan to today's rates, especially if they currently have a significantly lower loan,” continued Randeri.
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