This week the Federal Reserve left short-term interest rates alone, but signaled more hikes could be on the horizon in late 2023.
For the second time in three meetings, the Fed opted for a pause in its 17-month period of increasing borrowing costs with the benchmark interest rate remaining unchanged at between 5.25 percent and 5.5 percent.
The National Association of Realtors Chief Economist Lawrence Yun commented, "The Federal Reserve is rightly on pause and is looking for more data before determining its next course on interest rates. With fewer job openings, slowing job gains, and softening core consumer price inflation, the Fed must consider the potential economic damage arising from any future rate hikes. Moreover, commercial real estate has come under stress from higher interest rates, which will further negatively impact community banks due to their large exposure to the sector. Therefore, the Fed needs to wait and not raise rates. Possible interest rate cuts then need to be considered once inflation is fully under control."