The Federal Reserve’s uncertain rate path has led to recent interest rate hikes and volatility, according to a joint letter from the Mortgage Bankers Association, National Association of Realtors, and National Association of Home Builders addressed to Fed chairman Jerome Powell. The three industry groups have urged Powell and the Fed’s Board of Governors to refrain from further increases in the federal funds rate.
Additionally, they have requested that Powell make it clear that there will be no selling off of MBS holdings until stability is achieved in the housing finance market and mortgage-to-Treasury spreads return to normal levels. This action would provide greater certainty about future rates and plans for MBS portfolios.
The letter emphasizes that housing activity accounts for nearly 16% of GDP according NAHB estimates. Therefore, it urges the Fed to take these measures in order prevent a hard landing which they have been working hard avoid.
To stay updated on current market trends and what lies ahead in this cycle, attend Connect Investment & Finance 2023 on Oct. 24 at Hyatt Regency O’Hare in Rosemont IL by registering here.
