Harker Fed: Current interest rate environment is draining the housing market of new buyers



Mr. Harker of the Fed

Philadelphia Fed President Harker said this in a speech to the Mortgage Bankers Association.

  • Current interest rate environment is driving new buyers out of the housing market
  • US central bank reiterates that it is very likely to raise interest rates
  • We recognize the impact of recent Federal Reserve actions on the mortgage environment.
  • Highlights the Federal Reserve’s commitment to price stability and its goal of returning inflation to its 2% annual target.
  • Learn how rising mortgage rates affect housing market trends, including declining inventory and rising prices.
  • Although we are keeping an eye on the growth in new home sales, we acknowledge that the housing sector as a whole is slowing down.
  • He mentioned expectations for a steady elimination of inflation and a return to the 2% inflation target.
  • Recognizes the challenges in assessing disinflationary trends, such as monthly fluctuations in prices.
  • It advocates stable policy interest rates to control inflation and also mentions external factors that affect the economy.
  • We do not foresee a recession and expect GDP growth to continue.
  • The unemployment rate is expected to rise slightly, but mass layoffs are not expected.
  • Recognizes the various factors that influence unemployment rates, such as labor force participation rates.
  • He emphasized the need to balance both hard and soft data when making policy decisions.
  • This suggests that although the economy faces significant challenges, no fundamental changes have occurred since 2018 or 2019.
  • We recognize the resilience of our economy and the need to consider new data and perspectives.
  • We believe that a patient approach to monetary policy will lead to a soft economic landing and stable growth.

Harker is a voting member in 2023.

Harker’s comments were the first from many Fed officials this week, including Fed Chairman Jerome Powell, who will speak at the New York Economic Club on Thursday.

Below is the current schedule of Fed speakers. Starting this week, the Fed will enter a blackout period until its Nov. 1 interest rate decision.

This week’s Federal Reserve speakers

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