Williams makes a rate call that Wall Street isn’t buying
The rate path mortgage brokers need to watch
“I haven’t changed my view that it may be appropriate to have one more rate hike,” Williams told Bloomberg News.
“I don’t think at this time I have any reason to believe that we would need to do more.”
That view collides with where markets are positioned. CME FedWatch data as of October 13, showed roughly 90% odds the federal funds rate will end 2027 at least a half percentage point above its current target range of 3.75% to 4% — the product of the Fed’s first rate increase since 2023, issued in September.
The Mortgage Bankers Association (MBA) is also projecting a harder path. Chief economist Mike Fratantoni, senior vice president at the MBA in Washington, D.C., told the association’s annual convention in Chicago this month: “We think the Fed is going to be in a position where they have to hike a couple more times.”
“They’ve signaled pretty clearly now they’re going to take October off right before the election, and so a hike in December, a hike sometime in the first quarter, that’ll bring the Fed’s target Fed funds rate above the level of inflation, which is really what you need to put sufficient pressure on it to move down in, to use the Fed’s words, a timely fashion. But we think they’ll hold at that level really through much of the forecast window,” he said.
