Mortgage rates fall as the Fed hints at future rate cuts

June 19, 2019 - 2 min read

Fed holds rates steady, but markets expect rate cuts next month

The Federal Open Market Committee (FOMC) meeting ended Wednesday with a no-hike decision, but that didn’t dissuade markets from believing a July rate cut is in the works.

The Fed, under recent pressure to drop rates, altered its post-meeting statement from last month’s. It now suggests the economy is not as strong as the Fed thought it was just a few weeks ago.

Mortgage rates are falling on the news. Been waiting to lock your mortgage? Today might be the day.

Check rates after today's historic Fed meeting.

The Fed changes its tune

On May 1, the Fed released its post-meeting statement, which said that economic expansion was “solid” and that it would take a “patient” stance when considering future rate adjustments.

Fast forward to June, and key wording was changed.

Now, it says the economy is “rising at a moderate rate” and “uncertainties” about economic expansion have increased.

This was the hint that markets were waiting for.

Investors believe that a rate cut of 0.25-0.50% is coming during the Fed’s July 30-31 meeting.

Now, investors believe that a rate cut of 0.25-0.50% is coming during the Fed’s July 30-31 meeting. In fact, the “CME FedWatch Tool” published by CME Group shows that Federal Funds futures point to a rate cut in July.

Adding fuel to the fire, one of the 10 voting FOMC members wanted a rate cut at June’s meeting.

There was, most assuredly, a strong discussion of a rate cut soon rather than later.

As a mortgage shopper, should you wait until July?

The Fed doesn’t control mortgage rates. But it does impact the overall interest rate environment.

Even so, markets are already “pricing in” a rate cut in July. That means lower mortgage rates are available now.

If you’ve been waiting to lock in a mortgage, this could be the time. Because markets are forward-looking, July’s expected rate drops are “baked into” today’s rates.

What are today’s mortgage rates?

Mortgage rates continue downward in anticipation of big Fed moves in July.

Get a rate quote and see how much you can save on a home purchase or refinance.

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Tim Lucas
Authored By: Tim Lucas
The Mortgage Reports Editor
Tim Lucas spent 11 years in the mortgage industry before moving into the world of digital media. He's helped thousands of families buy and refinance real estate at banks and mortgage companies and now continues that mission through industry-leading content. Tim has been featured in national publications such as Time, U.S. News and World Report, MSN, Scotsman Guide, and more.