Feds scrap rate hikes

Feds scrap rate hikes

The Federal Reserve is not as confident in the future as it used to be.

In December 2018, it raised rates, but backed off its forecast to hike rates three additional times in 2019. It predicted just two rate increases this year.

Fast forward to the March meeting, where it completely scrapped plans to raise its benchmark rate at all.

It cited “slower growth of household spending and business fixed investment in the first quarter” as well as “global economic and financial developments and muted inflation pressures” as reasons it was backtracking on its rate-hiking plans.

This is the kind of sentiment that helps mortgage rates.

The group meets again on April 30-May 1. The Mortgage Reports doesn’t expect major policy changes at this meeting. Still, it’s a good idea to watch for updates at 2:00 PM ET on May 1 when the Fed adjourns.