This is MF Lending - the warm hot cocoa of mortgage newsletters. We’re the fool-proof way to serve up mortgage and real estate market knowledge without any of the guesswork. So you’ll look like the smartest agent in the room (and you are!)

Today - we have our FED Lunch & Learn! 🎉 Here are the sparknotes from JPow’s speech today (3/22):

1. FED Raises rates by 25bps

2. Anticipates minor (if any) interest rate hikes throughout the year

3. Expects credit tightening by banks to help inflation

Was this email forwarded to you? Subscribe to get it directly!

Nuwave Rates Today 📉

What does this mean for Mortgage Rates?

By the end of Jerome Powell’s press conference, the MBS market (the leading driver of mortgage rates) was up between 35-60 bps.

You can see that pretty green candlestick on the far right.

As this rate hike was expected by most estimates in the market (and predicted in our Monday edition, most of this hike was already priced into the market.

We should see mortgage rates fall slightly this week and stabilize.

The FEDs expectations shifted from the meeting in Feb after the collapse of SVB.

They no longer anticipate interest rate hikes will need to continue to help inflation.

The FED expects credit tightening by banks to aid in the reduction of inflation more than monetary policy.

Rate Expectations Through 2025

At each meeting, the FED produces a dot plot of their rate expectations annually through 2025.

Most members believe FED rates will hold above 5% for the entirety of 2023.

Summary - do not expect rates to come down this year.

The first indication of rate cuts begins in 2024 as we see expectations falling a full percentage point to 4%.

Then, in 2025, there is very little consistency between members on where interest rates will be.

The Cul-de-Sac

That’s all we have for today. Hope you enjoyed your lunch.