Fed gives strong signal that rate cuts are on the way
Delaware Valley Financial Mortgage, LLC.
Delaware Valley Financial Mortgage, LLC. PA
Published on August 27, 2024

Fed gives strong signal that rate cuts are on the way

I told you in my last update that the Fed would give plenty of warning before cutting rates and that is what we got today. Here is a snippet of what the Fed chair had to say today:

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“The time has come for policy to adjust,” the central bank leader said in his keynote address at the Fed’s annual retreat in Jackson Hole, Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Now it’s just a question of how much will the Fed cut rates. To give you an idea of where the markets are at right now they believe there is a 70% chance of a .25% cut and a 30% chance of a .5% cut. For the rest of this year the market is expecting a 1% cut in the Fed funds. There are three meeting left so that would mean one of the meetings they would be cutting .5%. In 2025 there is an expectation of another 2.25% in cuts. Now it’s hard to predict what is going to happen in the next couple months let alone the next year so take that with a grain of salt. For reference, the Fed funds rate is around 5.25% so cutting that by a couple percent is a big deal.

Also a quick reminder about the NAR settlement I wanted to share. If seller assist is being used to pay for the broker compensation then it does not count against the seller assist cap for any of the loan programs. Our team is here and ready to help answer any of your questions about how the new rules will impact you and your clients. Please contact us today!

Verify your mortgage eligibility (Oct 8th, 2024)

Recap:

-Fed chair Powell gave the green light for the Fed to cut rates next month

-Market is expecting 100 basis points or 1% in cuts

-Next jobs report is 9/6 and inflation report is 9/11

Show me today's rates (Oct 8th, 2024)
Delaware Valley Financial Mortgage, LLC.
Delaware Valley Financial Mortgage, LLC. PA
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