A shift in the housing market could cause the Federal Reserve to cap its rate hiking at one more quarter-point increase, Bill Gross of Newport Beach-based Pacific Investment Management Co. said Tuesday on CNBC.
“Housing in the next month or two will display extreme weakness, and the Fed will stop,” Gross said.
On Tuesday, the Federal Reserve raised the benchmark federal funds rate for a 13th straight time to 4.25%.
Gross, Pimco’s chief investment officer, predicts a rate cap of 4.5%, though others see at least two more hikes by the Federal Reserve.
On Tuesday, the central bank said it’s not done raising rates but is winding down its tightening effort to fight inflation.
Employment and wage growth also are considerations for the Fed, Gross said. He said he doesn’t expect either to raise red flags for inflation.
