If there are upward pressures on interest rates this year, they probably won't come from the Federal Reserve Board, a panel of top housing economists agreed.Participating in a conference call sponsored by the Homeownership Alliance, the chief economists of the Alliance's five founding members said if the central bank does tighten monetary policy, it won't start until midyear at the earliest. But David Berson of Fannie Mae said he doubts that the Fed will ratchet up the federal funds rate at all. The Fed "could remain on the sideline" for the entire year, Mr. Berson offered. Paul Merski of the Independent Community Bankers of America concurred, saying the funds rate "could remain at 1% for all of 2004." But even if the rate doubled to 2% over the course of the year, the Fannie Mae economist maintained, the Fed's posture would "still be extraordinarily expansionary." If the Fed tightens, added David Seiders of the National Association of Home Builders, it will be "easing off the accelerator, not putting on the brakes." David Lereah of the National Association of Realtors said significantly higher rates are not likely. But if they do rise, he added, the increase is likely to be caused by government borrowing to cover the huge budget deficit and greater dependence on foreign funds to pay for the growing trade deficit. Freddie Mac's Frank Nothaft offered the most optimistic forecast for mortgage rates, saying they shouldn't go any higher than 6.25% by year's end.

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