Fed Slows Rate Hike Forecast
As expected, the Fed did not change the federal funds rate at their March meeting. However, the statement contained guidance which reduced the expected number of rate hikes in 2016 from four to two. Reasons for this included a downgraded outlook for U.S. economic growth and inflation, as well as concerns about the pace of global economic growth. The statement was good news for mortgage rates, as this guidance pushes tighter monetary policy further into the future, including the expected timeline for the Fed to begin to reduce its large holdings of mortgage-backed securities (MBS) and Treasuries. The added demand for MBS from the Fed helps to keep mortgage rates low.
Factors: Existing Home Sales will be released on Monday, and New Home Sales will come out on Wednesday. Durable Orders, will be released on Thursday. The third estimate of fourth quarter Gross Domestic Product (GDP) will come out on Friday.
Check back next week for our weekly Mortgage Industry Updates! For specific rates, contact a Tradition Mortgage loan officer.