01/31/2025
No Surprises from the Fed...
This week brought plenty of economic news, but nothing too shocking. The Fed meeting came and went without much impact on mortgage markets, and inflation data landed right in line with expectations. The result? Mortgage rates ended the week slightly lower.
The Fed’s go-to inflation measure, the PCE price index, showed Core PCE rising 0.2% in December—exactly what economists expected. Year-over-year, it’s up 2.8%, the same as last month. While inflation has come down a lot from its peak, getting it to the Fed’s 2.0% target is proving to be the tricky part. On the economic growth front, GDP for Q4 2024 came in at 2.3%—a bit below the 2.6% forecast and down from 3.1% in Q3. Consumer and government spending helped boost growth, but a drop in business investment and inventory levels dragged it down. As expected, the Fed left rates unchanged, and their post-meeting statement didn’t have any big surprises. Investors did notice a small wording change about inflation progress, but Chair Powell quickly reassured everyone that it wasn’t signaling a shift in policy.
For now, the Fed is sticking to a data-driven approach when deciding what’s next. Looking ahead, all eyes will be on key economic reports next week, including job openings, employment data, and updates on manufacturing and services. These could give us a clearer picture of where the economy—and mortgage rates—might be headed. If you’re ready to open the doors to your dream home, reach out to our team today—we’re here to help!
