Inflation Expected to Get Worse

St. Louis Federal Reserve President, James Bullard, spoke with CNBC where he cautioned that inflation could become an even more serious problem without central bank action on interest rates (Cox, 2022). He believes that there’s been too much emphasis that inflation will dissipate, and is pushing the narrative that more than ever, we’re at risk of the 7.5% clip we’ve seen over the last year getting worse. 

Interest Rates To Increase

The federal reserve has resisted raising interest rates due to the pandemic’s clogged supply chains and outsized demand, but now, they are likely to start raising interest rates in March, which will be the first increase in over 3 years! After that, they anticipate that there will be 5 to 6 more rate hikes at 25 basis-point increments, totaling a full percentage by July. This is in an effort to contain price surges that are running at the fastest pace in 4 decades. 

Where To Go From Here

We can’t blame you if you’ve been on the fence about moving due to low inventory and rising inflation. However, based on the analyses of James Bullard and others in the industry, it’s looking like market conditions might worsen. If you are considering a move, it is our advice to take action now and sell your home for the highest prices we’ve ever seen and buy before interest rates increase! Call about our Guaranteed Sale Program or our Stay in Your Home Guarantee where you can take advantage of the market by selling your home now and staying in your home for up to twelve months. Call us now at 703-297-4251!

P.S. Our in-house mortgage company, Empower Home Mortgage, is fully-equipped to get you pre-approved fast so you can move up to your dream home! If you need a guide during this monumental chapter in your life, please don’t hesitate to reach out to us for advice and guidance! 

CITATIONS

Cox, J. (2022, February 17). Fed’s Bullard says inflation ‘could get out of control,’ so action is needed now. CNBC. Retrieved February 23, 2022, from https://www.cnbc.com/2022/02/17/feds-bullard-says-inflation-could-get-out-of-control-so-action-is-needed-now.html