It is Time!

September 17, 2024

We have received news that the job market has slowed down – including a major downward revision of jobs over the past year to the tune of 818,000 jobs. We have seen major progress on the war against inflation. The most recent consumer price index came in at 0.2 % monthly and 2.5% over the past year. The core numbers excluding the volatile components of food and energy were reported at 0.3% monthly and 3.2% annually – slightly higher than forecasts. Therefore, the stage has been set for the Fed to lower rates, however the higher than expected core numbers might make a larger cut less likely.

And the stage is in the form of a meeting of the Federal Reserve’s Open Market Committee which starts today and concludes early tomorrow afternoon. The markets are betting on a rate decrease announcement. As we have pointed out previously, we don’t believe that long-term rates will necessarily fall because of this action because long-term rates have already dropped in anticipation of the Fed announcement – including sharply lower mortgage rates.

This speculation could be wrong on two accounts. First, if the Fed lowers rates by 0.5% instead of the anticipated 0.25%. Secondly, if the Fed in their post meeting announcement declares that more rate cuts are on their way, this could prompt the bond markets to react again in anticipation of future Fed activity. Of course, there is always the chance that the Fed could disappoint the markets by not taking any action, which in turn could cause a negative reaction by the markets. If that happens, hopefully a positive statement about the future could be issued which might mitigate that possibility. 

Source: Origination Pro

AMERIMUTUAL is an Upfront Mortgage Broker that places a premium on transactional transparency.  Our valued clients appreciate this advantageous approach and enjoy the benefits of having a mortgage broker that is fully aligned with consumer interests. 

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Philip Loria, President 
Benny Loria, Vice President