At their last meeting in June, the Fed had a 75-basis point increase. That played a big part in the mortgage interest rates shooting up like crazy.
The Fed will now meet again at the end of July. Many economists predict the Fed will tighten its monetary policy further to control inflation. That could lead to another 75- or 100-basis point increase in the Fed’s short-term benchmark rate. While the Fed’s benchmark rate does not directly impact mortgage rates, it does influence them.
NAR Chief Economist Lawrence Yun said following the Fed’s last rate hike in June—its largest since 1994—that the buyer pool could shrink even further as mortgage rates increase.
