The Federal Reserve’s move likely to benefit K&B
- The first halt in rate hikes in 15 months
- K&B likely to see an increase in projects
- A possible return to hikes in July
By Elisa Fernández-Arias
Consumers can now breathe a sigh of relief as the Federal Reserve announced Wednesday a pause in its campaign of continuous rate hikes. The conditions will likely improve for the kitchen and bath industry as a result, however, it remains to be seen when and how these changes will take place.
For example, this could prove beneficial to the kitchen and bath industry, according to NKBA’s latest research, since consumers who feel relief from high-interest credit cards, mortgages and other loans may be more likely to use additional credit or take out remodeling loans for K&B projects. Additionally, some consumers who put large-scale projects on hold may now feel more confident about the economy and consider getting started on them.
However, the Fed also signaled on Wednesday that it would likely resume raising rates – even as soon as July. As a result, there is the possibility that consumers may take a wait and see attitude, continuing to put off their large-scale K&B projects until they are more certain about the state of the economy.
As NKBA’s recently released KBMI noted, however, the two segments that continue to chug along and contribute to K&B demand – despite the Fed’s volatility – are small, lower-cost remodeling projects and remodels driven by high-income households who are not relying on credit to finance these projects.