The following is MBA SVP and Chief Economist Mike Fratantoni’s commentary following the Federal Reserve’s FOMC statement released this afternoon on monetary policy and the economy:

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“Ongoing turmoil in the Middle East has significantly increased uncertainty regarding the current and future state of the economy. The spike in oil prices has the potential to both accelerate inflation and weaken economic growth. Amid this uncertainty, the FOMC decided to hold rates steady at its March meeting and reiterated that they are attuned to risks on both sides of their dual mandate to keep the job market strong and prices stable.

“The FOMC projections released after this meeting showed that the median member expects higher inflation in 2026. It also showed that little changed with respect to the economic growth outlook, which had been published in December. A growing number of FOMC members now expect no cuts – or at most, one – to the federal funds target this year, likely due to a more negative inflation outlook. This is a noticeable but predictable pullback from what had been published in December.

“Mortgage rates have moved up about a quarter percentage point in recent weeks as longer-term interest rates accounted for the increase in inflation and hence the reduction in the chance that Fed would cut further this year. We forecast that mortgage rates will range between 6% and 6.5% this year, and our latest weekly data show it’s trending towards the upper end of that range.”