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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“As the market anticipated, the FOMC left the federal funds target range unchanged at its January meeting. Inflation still remains above the Fed’s target, and the job market, while softening, has not changed appreciably since the Fed’s December meeting. Notably, there were two dissents at this meeting, both in favor of another 25-basis-point cut to the federal funds rate target.

“While not a unanimous vote, there does seem to be a clear and consistent majority in favor of a pause in this rate-cutting cycle, a pause that likely continues unless or until the job market weakens further. With inflation remaining elevated, the FOMC majority does not seem in any rush to make further rate moves.

“MBA’s forecast has been for mortgage rates to remain in a relatively narrow trading range for the foreseeable future, likely remaining between 6 and 6.5% for 30-year conforming loans. The news from this meeting does not change our forecast for mortgage rates. We expect that this level of rates will help support a somewhat stronger spring housing market than last year, but not a breakout year.”