Since then, the war in Iran has caused oil prices to jump, adding to inflation fears. Meanwhile, AI-related job losses are increasing, casting doubts on the overall health of the job market.
With all of that as the backdrop, the Federal Open Market Committee meets this week and will announce a rate decision on Wednesday. It is largely expected that they will hold once again, according to one veteran economist.
Sam Williamson (pictured top), senior economist at First American, said despite geopolitical turmoil and job market softening, the FOMC will likely stand pat.
“Policymakers appear poised to leave rates unchanged again this month,” Williamson told Mortgage Professional America. “Underlying conditions look little changed since the FOMC last met in January, with inflation still above the Fed’s target and the labor market softer, but not weak enough to force immediate action.
“Recent geopolitical events add another layer of uncertainty, particularly through energy prices, but not yet enough to alter the policy picture. That combination is likely to keep the Fed in wait-and-see mode until there is clearer evidence that inflation is moving sustainably lower.”
