Federal Reserve cuts rates; first time since 2008
The most anticipated Fed meeting in recent memory did not disappoint.
The Federal Reserve decided to cut its benchmark rate by 0.25%, the first cut in 11 years.
Just months ago, a Fed rate reduction was unthinkable: the economy was hotter than hot, with 50-year-low unemployment and record-breaking digits on Wall Street.
But as the year wore on, trade wars, Brexit, and diminishing economic data (plus mounting pressure from President Trump) spurred the Fed to cut rates pre-emptively, before a recession hit.
So, what does is that doing for mortgage rates today?Check today's rates with a loan expert. (Jul 16th, 2020)
Mortgage rates gyrate, but remain low, on rate cut news
Before the meeting, there was a 75% chance that the Fed would cut rates by 0.25%. So that was already priced into the mortgage rate market.
There was an outside chance of a 0.50% cut. That would have sent mortgage rates through the floor.
Barring that deep cut, markets were looking for a post-meeting statement that hinted at future rate cuts or stimulus. However, the announcement was more reserved than markets would have liked.
For instance, the statement said that the rate cut would likely lead to continued economic expansion, but “uncertainties about this outlook remain.”
Additionally, two Federal Reserve members voted agains cutting rates at all and advised maintaining the current federal funds rate level.
Still, mortgage rates are doing well today, holding to the best levels of the past week. Right now could be a great time to lock if you’re in the market to purchase a home or refinanceVerify your new rate (Jul 16th, 2020)
Where will mortgage rates go from here?
There will be serious gyrations in the mortgage rate market as analysts digest the rate cut and post-meeting announcement.
Expect rates to remain very low, however, as the Federal Reserve meeting and rate cut were not a disappointment by any means. Fed action has led to lower consumer mortgage rates, and now is a good time to capitalize on Fed news.Verify your new rate (Jul 16th, 2020)