Jerome Powell addresses high interest rates in Senate hearing

WASHINGTON (NEXSTAR)– Federal Reserve Chair Jerome Powell did not commit to a timeline for lowering interest rates in a hearing before the Senate Banking Committee on Tuesday.

“I am today not going to be sending any signals about the timing,” Powell said. “We need to see more good inflation data.”

Powell said he would like to see inflation down to 2%. The Bureau of Labor Statistics is expected to release the latest data on inflation on Thursday.

In the committee hearing on Tuesday, lawmakers pressed Powell on affordable housing. Data from Bankrate shows the median monthly mortgage payment increased from $1,525 to $2,268 between 2021 and 2023. In that time, the average yearly interest rate for a mortgage increased from 3.15% to 7%.

“There’s no question that higher interest rates are making it more difficult to buy homes,” Powell said. “The best thing we can do for housing is to succeed in getting inflation down to 2% on a sustainable basis so that rates can come down.”

The Federal Reserve raised interest rates between March 2022 and August 2023 to combat high inflation. Those rate increases indirectly affect home mortgage rates, economic experts said.

“In lockstep, more or less, with what the Federal Reserve was doing to combat inflation, we saw mortgage rates move up sharply as well,” said Mark Hamrick, Senior Economic Analyst at Bankrate.

Hamrick said he expects mortgage rates to slowly start coming down within the next six to 12 months. He said he expects the Fed to start reducing interest rates, as well.

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