09/18/2024
🚨 Fed announcement TODAY 🚨: Short and sweet details
Thought I would add some color to what the Fed meetings really accomplish and what we could expect as an industry. Don’t get me wrong, rates are undoubtedly moving in a positive direction for our industry, but with the incessant posts from lenders about low low rates I thought it would be helpful to add some additional guidance.
It is widely predicted by the market that there will be a total of .75 in rate cuts by the end of the year. Should the initial reduction be .25 today, it would result in .50 left over for the remaining two Fed meetings (November and December). The Fed will also release their revised projections and if those indicate rate cuts surpassing this .75 amount, the bond market is likely to experience a rally and mortgage rates could drop. Conversely, if there are indications of only one additional .25 reduction before the year-end, this could trigger bond selling and a mortgage rates to bounce back up.
There is also a chance they cut rates by .50 today, this would be impactful! This would undoubtedly rock the markets and possibly we could see a downward revision to mortgage rates most likely by late afternoon. The amount of decrease and longevity of the rate drop would be heavily predicated on the projection information mentioned above.
As mortgage rates are forward looking, a status quo outlook from the Fed simply confirming the markets thoughts may not move the needle drastically rate wise. We have seen a recent decrease in rates and a lot of that can be attributed to that anticipated number referenced earlier.
All that being said… I am an optimist!! Things are looking good, and I see NO reason we can’t all finish 2024 strong and make 2025 an absolutely amazing year!!!!