Federal Reserve keeps benchmark interest rates unchanged

“Recent indicators suggest that economic activity has continued to grow at a solid pace,” the FOMC said in a statement that announced his decision. “The unemployment rate has stabilized at a low level in recent months and the circumstances of the labor market remain solid. Inflation remains somewhat increased.”

On Tuesday UCLA forelators Published a “recession watch” due to various factors. They noted that the workforce that is connected to increased deportations will lead to labor shortages for sectors such as agriculture and construction.

The analysis has also established that rates will increase prices for various goods and production inputs. And it noticed the electricity effects of dismissals and restructuring efforts in the federal government.

During his usual press conference after the announcement, FED chairman Jerome Powell the potential for a recession. But he warned that this exists at all times and believes that the opportunities “are still at relatively moderate levels.”

“There is always an unconditional probability, possibility, of a recession. It can be broadly at any time in the reach of one in four, if you look back over the years,” he said. “It’s raised, but it’s not high.”

Turn into the crystal ball

In their summary of economic projections, FED officials lowered their expectations for the growth of gross domestic product (BBP). They expect a GDP growth of 1.7% in 2025, at an estimate of 2.1% in December.

They also revise their expectations for unemployment and their preference measure for inflation, the Core Personal Consumption Expenditures (PCE) index. The unemployed rate will now be on average 4.4% on average this year, with core -PCE inflation (excluding volatile food and energy prices) on average 2.8%.

Powell said that predictors from the central bank work on separating rate -controlled price increases from those who are not directly related to rates. He also called tariff-controlled inflation ‘transmitting’, and therefore the majority of FED officials still project a few interest rates this year.

A reporter pointed out that the FOMC predicted lower price growth during the COVID-19 Pandemie, an expectation that was never released as inflation on an annual basis achieved a peak of 9.1% in June 2022. Powell said that today’s economy is a ‘different situation’.

“If there is an inflatory impulse that will disappear automatically, this is not the right policy to tighten the policy, because by the time you become a design, you lower economic activity and employment. And if that is not necessary, you don’t want to do it,” Powell said.

Voxtur CEO Ryan Marshall said that “stubborn inflation” continues to influence American households every day. He indicated that the task of the Fed has become more difficult because it must weigh the consequences of rates and probably keep the interest rates longer.

“That said, because the economy seems to continue its so -called ‘soft landing’, we expect that the mortgage interest will gradually float throughout the summer, but not with more than one percentage point,” Marshall said.

Fed vs. White house

The mortgage interest rates went this week, although the average loan of 30 years of 30 years is about 30 basic points lower than at the start of the year, according to Housingwire’s MortGage Rates Center. The mortgage demand fell by 6.2% during the week ending on March 14, according to data that on Wednesday by the Mortgage banking association (MBA).

Housing Wire -lead analyst Logan Mohtashami said earlier this month that the battle for interest rates will probably heat up. Fed Stoel Jerome Powell has tried to distance themselves and other policy makers from political pressure such as the White House and Treasury Civil servants insist on lower rates to stimulate economic activity.

“If the economy falls into a recession, the opinions of the White House or the Federal Reserve will take a rear seat – the real drivers will fall bond returns and mortgage interest,” Mohtashami wrote. “However, how much they fall is mainly in the hands of the FED, which arranges around 65% to 75% of the shifts in the return of 10 years and mortgage.”

On Tuesday, Trump fired two members of the Democratic Commission of the Federal Trade Commission (FTC). The FTC is designed as an independent regulatory body and the displaced aroused that the Trump administration could go on behind other independent groups such as the FED.

In December Powell said he Wasn’t worried where the FED loses its legal independence. And on Wednesday, in response to the question of a reporter about this issue, he did not admit.

“I answered that question in this room some time ago. And I don’t feel like changing that answer and I don’t have anything new about it today,” said Powell.

What happens to the sale of houses?

Odeta Kushi, deputy chief economist at First American Financial Corp. Also acknowledged the rising risk of a recession. But she pumped the brakes about what a recession could mean for the housing market.

“A recession alone does not necessarily lead to a decline in a home. The performance of the housing market is dangerous from the causes of the recession and how the Fed responds,” Kushi said in written comments.

“Wanneer de economie vertraagt, verlaagt de Fed doorgaans de rentetarieven om de groei te stimuleren. Als gevolg hiervan dalen de hypotheekrente vaak, waardoor de betaalbaarheid wordt verbeterd en het kopen van het huisverdrijvend. Deze dynamiek was duidelijk in recessies uit het verleden waar de renteverlagingen de verkoop van huizen aanmoedigen. Zelfs te midden van economische onzekerheid, kunnen lagere borreltische kosten de huizen aantrekkelijker maken, wat een aantal van de encouraged negative effects of the reclamation of the recession. “

The first American predicted this week that the sale of existing at home for February would rise by 1% compared to the previous month, which would also be an increase of 4.7%.

Mortgage companies such as KiaviA private lender established in San Francisco who is suitable for real estate investors, has their eyes on the FED policy while trying to gauge the demand for borrowers.

“We expect some short -term volatility for the next six to nine months, but anticipating the market that will stabilize in the next 18 months, since the FED offers more clarity about its interest rate policy for the rest of 2025,” Tim Lawlor, Chief Financial Officer of Kiavi, told HOUSINGWIRE in written commentar.

Lawlor also noted that tariff -controlled increases in the costs of building materials, as well as the current shortage of the building sector, influence the strategies of real estate developers. While housing markets in earlier hotters such as Texas and Florida are “starting to mitigate,” he said, others in midwest and northeast perform relatively well.

“Real estate investors must also be careful with the markets that show increasing days on the market for home sales. Real estate investment is based on a safety margin: buy at the right price, have exit options and stay in harmony with local trends.”