Federal Reserve continues interest rate hikes, federal funds rate at highest since 2007
CAPE GIRARDEAU, Mo. (KBSI) – Inflation has continued to cool down, and so has the Federal Reserve’s hiking of interest rates.
Wednesday, the Fed raised short-term interest rates by a quarter of a percentage point, bringing the federal funds rate to between 4.5 percent and 4.75.
And while this is as high as it has been since October 2007, right before the Great Recession, Southeast Missouri State professor David Yaskewich said the times we are currently in do not compare to that recession.
“That had to do with a lot of risky loans being given out on a wide-scale basis, and that’s something that we don’t quite see today to that extent, so I don’t think we can compare the two points in time or the two scenarios,” he said.
As for the housing market, mortgage rates are hovering around the 6 percent mark, which Jared Ritter of Ritter Real Estate said compared to years previous, really isn’t too bad.
But now, with not as much inventory, options are relatively limited for buyers. However, any time you are searching for a house, especially with how things currently stand, you do not want to go it alone.
“Without that professional advice, for where the market is right now, that could cause some serious trouble,” Ritter said. “That agent and lender relationship, having them work closely together with the client, will most definitely be a huge tipping point in a lot of the purchases that you see this year.”
As for when we may see a halt in interest rate hikes, Yaskewich said that will depend on multiple factors.
“It’s really dependent on economic performance,” he said. “Both the inflation data and the unemployment or the labor market data would likely have some impact on the questions of will we see future increases in the federal funds rate at future meetings of the Federal Open Market Committee this year?”
There will still be two more rounds each of inflation and labor market data between now and the next meeting on March 21, so we will have to wait and see.