Federal Reserve Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, May 1, 2024. The sharp interest rate hikes of the past two years will likely take longer than previously expected to bring down inflation, several Federal Reserve officials have said in recent comments, suggesting there may be few, if any, rate cuts this year.
“I think the Fed’s telling you hikes are not quite as on the table as the market was expecting,” said Gennadiy Goldberg, an economist at TD Securities. The Fed has pushed its key rate to a 23-year high of 5.3 percent in an effort to bring down inflation, which peaked at 9.1 percent in June 2022. “One of the things we hear is that maybe because so many Americans refinanced their mortgages when mortgage rates dropped during the pandemic…people are not feeling the bite of higher mortgage rates yet,” Neel Kashkari, president of the Federal Reserve’s Minneapolis branch, said last week. “If that’s true, and I think there’s some truth to that, then it may take longer” for the Fed’s rate hikes “to be fully felt by the housing market and by the economy more broadly.