The Fed, Hedge Funds & the Bubble-meter

The Fed signals earlier interest rate ‘lift-off’, Housing bubble indicator 2008 style

There are three market forces that will shape our collective future in reverse mortgage lending. First the Fed. Last Wednesday Federal Reserve Chairman Jerome Powell held a presser following a two-day meeting of the Federal Open Market Committee. Powell announced the Fed has moved up its projected interest rate hike timetable. The Fed’s Dot-Plot shows there could be two interest rate hikes in 2023. The operative word is projected meaning those hikes are far from certain. The market responded to the Chairman’s comments dropping 382 points and then bouncing back as Powell pointed out those projections need to be taken with a “big grain of salt”.  Barring some unexpected economic events, it appears that reverse mortgage borrowers will continue to benefit from historically low interest rates perhaps well into 2023. That gives reverse lenders two years to maximize an ideal lending environment.

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CNBC: Federal Reserve meeting full recap: Chair Jerome Powell’s market-moving comments

The Atlantic: BlackRock Is Not Ruining the U.S. Housing Market

Bloomberg: World’s Bubbliest Housing Markets Flash 2008 Style Warnings

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