WASHINGTON (NEXSTAR) – Federal Reserve Chairman Jerome Powell did not offer a timeline for cutting interest rates during a Senate Banking Committee hearing on Tuesday.
“I'm not going to send any signals today about timing. We need to see better inflation data,” Powell said.
Powell has said he wants inflation to fall to 2%. The Bureau of Labor Statistics is due to release its latest data on inflation on Thursday.
During a committee hearing on Tuesday, lawmakers pressed Powell on affordable housing. According to data from Bankrate, the average monthly mortgage payment increased from $1,525 to $2,268 between 2021 and 2023. During that time, the average annual interest rate on a mortgage rose from 3.15% to 7%.
“There's no question that rising interest rates are making it harder to buy a home,” Powell said. “The best thing we can do about the housing issue is to bring inflation down sustainably to 2 percent and lower interest rates.”
The Federal Reserve has increased interest rates from March 2022 until August 2023 to combat high inflation. According to economic experts, these interest rate increases will indirectly impact mortgage interest rates.
“Mortally in lockstep with the Fed's efforts to combat inflation, mortgage rates have also risen sharply,” said Mark Hamrick, senior economic analyst at Bankrate.
Hamrick said he expects mortgage rates to start to gradually decline within the next six to 12 months, and that he expects the Federal Reserve to start cutting rates as well.