Under Pressure
This week’s “pop” hit is the October of 1981 “Under Pressure” by Queen & David Bowie. This could not be truer for our friends with the Federal Reserve as more and more data keep coming in showing that we are moving quickly into recession and that their pipe dream of a soft landing will most likely not happen. Prices at the pump are now at their lowest levels since February of this year, which is helping drive inflation down along with unemployment rising and household named companies closing their doors due to slower sales. They are once again late to the dance and now have placed themselves in a position where they may need to make a .50% cut later this month as opposed to their widely expected .25%. While I believe that a .50% move is certainly warranted, odds are they won’t do it in order to not appear that they are panicking and stay with their “soft landing” approach, which will most likely include two more moves this year totaling .75% by the end of the year (my prediction earlier this year). They truly need to embrace one of the lines from this week’s “pop” hit… “These are the days it never rains, but it pours”… The “storm” is upon us… They need to move .50% now, which should send rates lower from a mortgage perspective as well as pretty much all borrowing costs in the US. The market has already “baked” in a .25% move. So, unless we do get a surprise .50% cut in a few weeks. Don’t count on mortgage rates moving notably lower in the near term. I am still holding to my overall .75% cuts by the end of the year but just maybe we could see a full point cut if inflation continues to fall and unemployment continues to rise. I know we hear that they don’t want to appear to be “political” in an election year and how it’s “taboo” to make significant cuts prior to the election. But not sure how pulling the economy out of the “ditch” is a bad thing for either side of the aisle.
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
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Blog post date: Thursday, September 5, 2024
