The Fed hits the housing market with another economic shock—it won’t be the last

The goal, Powell says, is to see the 8.5% annual rate of inflation fall back to the Fed’s 2% target rate. “Whether or not the housing market will be ‘quantitatively uneasy’ with allowing $35 billion in mortgage-backed securities to run off the balance sheet each month will depend on mortgage-backed securities demand, which will dictate whether mortgage rates go up much more,” Kushi tells Fortune. This economic shock caused by spiking mortgage rates should soften the housing market and see home price growth decelerate.

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