Inflation is now hovering just above the Fed's 2 percent target, while unemployment is at a three-year high of 4.3 percent, indicating the agency may have missed the 'soft landing' it was aiming for by holding interest rates at higher levels.
Mortgage rates are tied to the 10-year treasury, not the Fed, but can be influenced by the same economic factors that affect the agency's decision to raise or lower interest rates. Movement, or even anticipated movement, from the central bank often comes alongside changes in mortgage rates - which dropped to a 15-month low in the week after the jobs report.
"For the whole market to be on the edge of its seat for even a 50-point basis reduction, it's been raised so many times significantly that everybody's cheering," Crescenzo said. The likely cut won't be significant enough to move the needle for strapped borrowers, but interest rate movement would be a boon to consumer sentiment.
"We've seen sort of a global meltdown in equities," said mortgage banker Melissa Cohn. "The contagion is spreading around the world, and there is a great sense that the economy is in much worse shape than the Fed alluded to."
#feds-monetary-policy #mortgage-rates #economic-impact #global-economic-concerns #rate-cut-anticipation
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