I tell you what, it’s a lot more fun writing these updates when there is a lot of good news to share! The Fed met this week and didn’t cut rates as was expected but paved the groundwork for a cut in September. While Fed Chair Jerome Powell was non-committal on the timing of the rate cut he sounded like someone who badly wanted to say that they are going to cut rates in September. We also found out that some members of the Fed wanted to cut rates at this meeting but ended up falling in line with the Fed chair. Bottom line here is that it sounds like as long as inflation data remains tame and just doesn’t go up the Fed will cut. There is even a chance that we get a ½% cut.

Now I’m going to give my standard spiel when it comes to interest rate cuts. If the Fed does cut rates in September by ½% it does not mean that mortgage rates will be ½% lower that day! By the time the Fed cuts rates mortgage rates will have already priced this in. You can see this by what mortgage rates have been doing over the last few months. Going into this year the Fed said they were projecting three cuts or .75%. It looks like they are going to be right on the money. My guess is that September won’t be the only time they cut rates this year.

I do expect the good times to roll when it comes to mortgage rates. That doesn’t mean there won’t be spikes here and there. For instance, there is a jobs report tomorrow and the market is expecting that to be below expectations. If it’s a surprise to the upside than rates could jump a bit on that news. Right now the momentum is favoring lower rates and once that is the case it is harder to fight that. While it’s a little too soon to declare victory over inflation and higher rates we are looking to be in great shape for the remainder of the year.

Recap:

-No rate cuts at this week’s Fed meeting

-September is target for first rate cut

-July jobs report is tomorrow which can have big impact on rates