Feds Harker: Current interest rate environment draining housing market of new buyers

<p>Fed's Harker, president of the Philadelphia Fed, in a<a href="https://www.philadelphiafed.org/-/media/frbp/assets/institutional/speeches/harker/2023/10-16-23-mba-speech.pdf" target="_blank" rel="nofollow"> speech to the Mortgage Bankers Association</a> said:</p><ul><li>Current interest rate environment draining housing market of new buyers</li><li>Reiterates US central bank very likely done with rate hikes</li><li>Acknowledges the impact of recent Federal Reserve actions on the mortgage climate.</li><li>Highlights the Federal Reserve's commitment to price stability and the goal of returning inflation to a 2 percent annual target.</li><li>Discusses the impact of rising mortgage rates on housing market dynamics, including decreased inventory and elevated prices.</li><li>Notes the growth in new home sales but acknowledges the overall slowdown in the housing sector.</li><li>Mentioned his expectation of steady disinflation and a return to the 2 percent inflation target.</li><li>Acknowledges challenges in assessing trends in disinflation, such as monthly variability in prices.</li><li>Advocates a steady policy rate to press down on inflation and mentions outside factors influencing the economy.</li><li>Expects GDP growth to continue, with no anticipation of a recession.</li><li>Anticipates a slight increase in the unemployment rate but does not foresee mass layoffs.</li><li>Acknowledges various factors influencing the unemployment rate, such as labor force participation.</li><li>Emphasizes the need to balance both hard and soft data in making policy decisions.</li><li>Suggests that while the economy has faced significant challenges, fundamental changes have not occurred since 2018 or 2019.</li><li>Recognizes the resilience of the economy and the need to consider new data and viewpoints.</li><li>Believes a patient approach to monetary policy will lead to a soft landing and stable economic growth.</li></ul><p>Harker is a voting member in 2023.</p><p>The comments from Harker are the first from a number of Fed officials this week including the Fed chair Powell who will speak on Thursday to the Economic Club of New York. </p><p>Below is the current schedule of those Fed speakers. After this week, the Fed will be in the blackout period before their November 1 interest-rate decision.</p>

This article was written by Greg Michalowski at www.forexlive.com.