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As expected (by most), the Federal Reserve kept the rates steady, though for the first time since 1993, two of the Committee members voted against the chair for a 25-basis-point cut. Housing was mentioned exactly zero times in the press release and only once in Chair Powell’s opening statement.
Two reporters brought it up, though, during the FOMC press conference, with one of them asking Powell how he justified keeping the rates in the range of 4.25% to 4.5% when it meant mortgage rates remained elevated, keeping potential homebuyers stuck on the sidelines.
Put differently, is this hesitation part of some master plan that will somehow benefit homebuyers in the longer run? Or is housing just not part of Powell’s calculus?
The Fed chairman argued, again, that the best thing the Committee can do to “contribute to housing” is to get to 2.0% inflation. And since some tariff-induced inflation is still expected in the coming months, the move right now is…to stay put.
Judging by some of the other reporters’ questions, that line has been played out.
Housing Mentions during the FOMC Press Conference
At the FOMC press conference, Chair Powell made one very brief mention of the housing market in his opening statement. During the presser, two reporters brought it up in relation to the Fed’s 9-to-2 decision to keep rates unchanged.
Others asked the chairman for clarification on the likelihood of a rate cut in September, as well as whether a continued pause could incentivize businesses to raise prices.
We’ll start with Powell’s brief mention of housing in his opening statement (02:42):
“Although the increase in the second quarter was stronger at 3%, focusing on the first half of the year helps smooth through the volatility in the quarterly figures related to the unusual swings in net exports. The moderation in growth largely reflects a slowdown in consumer spending. In contrast, business investment in equipment and intangibles picked up from last year’s pace. Activity in the housing sector remains weak.”
Mentions of Housing by Reporters and Powell’s Responses
Edward Lawrence of FOX Business and Jeff Cox of CNBC.com were the only reporters at the presser who mentioned housing (or any other housing-related term).
Chair Powell’s responses will sound familiar. Read on for transcripts of the most relevant questions and Powell’s responses.
(07:22) – Question from Howard Schneider, Reuters:
“There’s a lot of lean in the markets, and not to mention out of the administration, for a rate cut now in September. Is that expectation unrealistic at this point?”
Powell’s response (07:34):
“So as you know today we decided to leave...
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