Let’s Talk about what’s been happening in the mortgage market over the past week. As you know, the economy can have a big impact on interest rates, so let’s break down some of the key reports that came out between September 16th and September 20th.
One of the biggest news items this week was the Federal Reserve’s decision to cut interest rates by 50 basis points. This is a significant move that can have a direct impact on mortgage rates. When the Fed lowers interest rates, it generally makes borrowing cheaper, which can lead to lower mortgage rates.
Now, let’s talk about some of the other economic reports. We had the Initial Jobless Claims report, which came in lower than expected, suggesting a strong labor market. This could put upward pressure on interest rates.
Next up was the Durable Goods Orders report. This one focuses on big-ticket items like cars and appliances. If people are buying more of these things, it can also indicate a strong economy, which again can push rates up. The durable goods orders report was a bit mixed, but overall, it didn’t cause too much of a stir in the market.
Looking ahead to the week of September 23rd to September 27th, there are a few more reports that could impact mortgage rates.
The Personal Consumption Expenditure (PCE) index is one of them. This is the Federal Reserve’s preferred measure of inflation. If inflation is rising faster than expected, the Fed might feel the need to raise interest rates to cool things down. That could mean higher mortgage rates for us.
Another important report is the Gross Domestic Product (GDP). This measures the overall economic output of the country. If GDP grows more strongly than expected, it could also lead to higher interest rates.
So, there you have it! It’s a bit of a balancing act right now. The Fed’s rate cut is generally a positive development for borrowers, but other economic factors could influence interest rates. It’s important to stay informed and be prepared for potential rate changes.
Fun fact: Did you know that the former chief economist of the Federal Reserve, Alan Greenspan, was often referred to as “the Maestro” due to his ability to guide the economy through various challenges?”
As Always, feel free to reach out wit any questions
-tom