St. Louis Fed President Chris Waller's comments indicate that potential rate cuts could be on the table if inflation trends continue downward, surprising some market expectations.
While some market players anticipate rate hikes, Waller's views suggest a shift towards considering the solid yet non-booming labor market as more pivotal for the Fed's decisions than inflation.
The labor market's current state—a steady but not booming condition—combined with rising mortgage rates and potential job losses in construction, points to a precarious economic environment.
With housing starts and permits at recession levels, 2025 appears to be a critical year ahead as builders face mounting challenges, influencing Fed policies and mortgage rates.
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