“This is the toughest thing, because you have to slow down the economy, you have to slow down inflation, and the way you do that is raising interest rates,” Moynihan said, referring to the Fed’s actions. “The intended outcome of their policies doesn’t feel good when you’re trying to buy a home.”
The Fed’s efforts to tame inflation could take about two years, leading to a slowdown in mortgage activity, he said. Rising rents are also going to strain on the finances of Americans who rent their homes, he said.
Despite the softness in housing, Moynihan cited a strong labor market and resilient consumer spending as buffers for the economy as it approaches a “mild recession” next year, he said.
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