Mortgage Rates Inch Toward 6% as Fed Weighs October Cut

"Lenders and analysts have been anticipating that the Federal Reserve will announce another quarter-point cut to the federal funds rate at their Oct. 28-29 meeting. Central bankers will make their decision with limited information, as official data like the September jobs report haven't been released amid the ongoing government shutdown. The average 30-year fixed mortgage rate fell four basis points to 6.04% APR in the week ending Oct. 23, according to rates provided to NerdWallet by Zillow."

"Fed Governor Christopher Waller said he supports further cuts to the federal funds rate while speaking at the Council on Foreign Relations in New York last week. He acknowledged that with economic activity and unemployment both on the rise, the Fed will need to move with caution. Susan M. Collins, a fellow member of the Federal Open Market Committee and president and CEO of the Federal Reserve Bank of Boston, indicated that she was also in favor of lowering rates."

"Collins' position on inflation was strengthened by the latest Consumer Price Index, one of the very few economic indicators we've gotten during the government shutdown. Released on Oct. 24, it showed inflation at 3% over the past 12 months - slightly below economists' expectations. While the Fed needs to consider both inflation and employment, Waller said labor will likely be "the more salient factor" for monetary policy decision-making. That is to say, cutting rates could cause inflation to rise a little more, but the Fed may be willing to take that risk in order to curb worrying unemployment n"

Mortgage rates declined for a fourth consecutive week, with the average 30-year fixed rate at 6.04% APR for the week ending Oct. 23. Lenders and analysts expect the Federal Reserve to announce a quarter-point cut to the federal funds rate at its Oct. 28-29 meeting. The Fed will make decisions with limited official data because of an ongoing government shutdown that has delayed reports like September's jobs figures. The Consumer Price Index showed 3% year-over-year inflation, slightly below expectations. Several Fed officials signaled support for cuts, prioritizing labor market risks over modest inflation increases.

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