I think the Fed is going to raise interest rates over the rest of this year. I think it will go up at least 100 basis points before the year is out. So the Fed funds rate will rise from about 6 percent to at least 7 percent. The big question is going to be, 'Will the market believe the Fed will beat inflation' If it believes that, then the long-term rates will probably come down and that will be good for housing for the long-term rates to come down. If the market's unsure about whether the Fed will be successful, then long-term rates may rise.
More Quotes from Franklin Raines:
It will be the second-best year in housing history, and we believe it will be a very strong year for Fannie Mae,Franklin Raines
Well, you know, we've got a lot of stimulus in the economy already from the tax cut, from the lowered interest rates, and also from the refinancing of mortgages.
Franklin Raines
People are buying new homes, existing homes at record levels. And that just shows the underlying strength of the economy and the optimism of families that this is still a good time to buy a home even though interest rates on mortgages have risen substantially,
Franklin Raines
We are in favor of having the most accurate measure of inflation possible, in order to index those various programs, and we are trying to measure what the real cost-of-living changes are,
Franklin Raines
We are working on a wide variety of ways to bring to the mortgage finance system cost savings for consumers as well as lenders in the mortgage market,
Franklin Raines
We think if the economy remains weak that we could see mortgage rates trail down and we think that we could see rates below seven percent into early next year.
Franklin Raines
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