“I agree with the IMF,” Rob Levy, branch manager at HomeStreet Bank, told Mortgage Professional America. “The recovery hasn’t been great; it’s been slow and steady and you don’t want to mess with that [by raising the rate].”
Levy says raising the interest rate could slow down the housing market, which would have an adverse effect on the overall economy.
His comments come on the heels of an IMF paper, published Thursday, that advised the Fed to delay raising its benchmark rate until more concrete signs of inflation and stronger labor data is seen.
"The Federal Open Market Committee’s (FOMC) decision should remain data-dependent, with the first increase in the federal funds rate waiting until continued strength in the labor market is accompanied by firm signs of inflation rising steadily toward the Federal Reserve’s 2% medium-term inflation objective."
Despite these calls, it appears the Fed is preparing to hike its rate.
A Reuters poll published Tuesday showed a 70% chance of a rate increase by the Fed at next month’s December 15-16 meeting.
If that does happens, Levy thinks it will have an impact on broker business.
“I’m sure it will have some short-term impact on business; there is always a little panic in the market when rates go up,” he said. “But they’ve been threatening to do this for a year-and-a-half.”
The IMF is advising the Federal Reserve to hold off on raising its key interest rate at next month’s meeting, and one broker is on board with that plan.