On the conclusion of its January coverage assembly, the Federal Open Market Committee strongly signaled that it’s going to undertake its first, post-Covid improve of the federal funds fee in March. The Fed is tightening financial coverage in response to the very best inflation readings in almost 40 years. These inflationary pressures have elevated each shopper prices and companies enter prices, together with these confronted by the residential development sector.
The Jan. 26 coverage announcement famous clearly:
With inflation nicely above 2% and a robust labor market, the Committee expects it’ll quickly be applicable to lift the goal vary for the federal funds fee.
NAHB Chief Economist Robert Dietz gives an in-depth evaluation on what the Fed motion will imply for housing and rates of interest this 12 months on this Eye on Housing weblog publish.