{"id":58874,"date":"2024-09-19T03:03:37","date_gmt":"2024-09-19T01:03:37","guid":{"rendered":"https:\/\/housesmarketplace.com\/fed-goes-big-slashing-interest-rates-by-50-bps\/"},"modified":"2024-09-19T03:03:37","modified_gmt":"2024-09-19T01:03:37","slug":"fed-goes-big-slashing-interest-rates-by-50-bps","status":"publish","type":"post","link":"https:\/\/housesmarketplace.trio-tv.com\/ru\/fed-goes-big-slashing-interest-rates-by-50-bps\/","title":{"rendered":"\u0424\u0420\u0421 \u0438\u0433\u0440\u0430\u0435\u0442 \u043f\u043e-\u043a\u0440\u0443\u043f\u043d\u043e\u043c\u0443, \u0441\u043d\u0438\u0436\u0430\u044f \u043f\u0440\u043e\u0446\u0435\u043d\u0442\u043d\u044b\u0435 \u0441\u0442\u0430\u0432\u043a\u0438 \u043d\u0430 50 \u0431\u0430\u0437\u0438\u0441\u043d\u044b\u0445 \u043f\u0443\u043d\u043a\u0442\u043e\u0432"},"content":{"rendered":"
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The Federal Reserve<\/strong><\/a> lowered its benchmark interest rate on Wednesday by 50 basis points (bps) to a range of 4.75% to 5%, turning an important corner in the central bank\u2019s fight against inflation<\/a>.\u00a0The cut is the first since March 2020 after the Fed raised interest rates to a 23-year high point to cool the economy and quell inflation.\u00a0<\/p>\n

With both inflation and the labor market cooling, economists and housing professionals alike had expected the Fed to cut borrowing costs in September, with the big question<\/a> being how large the cut would be.\u00a0<\/p>\n

Generally, the Federal Open Market Committee<\/a><\/strong> (FOMC) tends to raise or slash interest rates by increments of 25 bps, but they can move faster when they think their rate stance isn\u2019t well aligned with the balance of risks. In 2022, the central bank upped rates by increments of 50 and 75 bps to fight 40-year-high inflation.\u00a0<\/p>\n

Fed Chair Jerome Powell<\/a> told reporters at a post-announcement press conference that central bankers have digested a lot of data since their previous meeting at the end of July, when they chose to leave rates unchanged<\/a>. This included two employment reports and two inflation reports.<\/p>\n

\u201cWe took all of those \u2026 and we thought about what to do, and we concluded that this was the right thing for the economy, for the people that we serve,\u201c Powell said of the 50-bps cut.<\/p>\n

The FOMC\u2019s Summary of Economic Projections<\/a> shows that most officials project further cuts by the end of 2024. And the majority also predict a target range below 3.5% by the end of next year, which would represent a 2-point drop from the previous peak. Policymakers are scheduled to meet again in early November and mid-December.<\/p>\n

The Consumer Price Index \u2014 the Fed\u2019s preferred inflation gauge \u2014 posted 2.5% growth<\/a> for the year ending in August, down from 9.1% in the summer of 2022. At the same time, the unemployment rate rose to 4.2%<\/a>, up from a recent low point of 3.4% in April 2023.<\/p>\n

With the recent weakening of labor data, some analysts have wondered whether the Fed\u2019s lack of movement prior to this point has caused them to be behind the curve.<\/a><\/p>\n

\u201cWe don\u2019t think we\u2019re behind. We think this is timely,\u201d Powell said Wednesday. \u201cBut I think you can take this as a sign of our commitment that we don\u2019t want to get behind\u201d<\/p>\n

Many market observers had flipped their expected cut from 25 bps to 50 bps without any key data release as a catalyst. On Wednesday morning, the CME Group<\/strong>\u2018s FedWatch tool<\/a> showed that 55% of traders expected officials to slash rates by 50 bps while 45% projected a smaller cut of 25 bps. Less than a month ago,<\/a> 71% of traders leaned toward a rate cut of 25 bps.<\/p>\n

Mortgage rates, which often correlate with the 10-year Treasury yield, have trended down in recent months.\u00a0At HousingWire<\/strong>\u2018s Mortgage Rates Center<\/a> on Wednesday morning, the average rate for a 30-year conforming loan was 6.31%. That figure was down 13 bps from a week ago and 27 bps lower than two weeks ago.<\/p>\n

\u201cThe Fed\u2019s 50bp rate cut likely adds downward momentum for mortgage rates, which have already come down materially since May as treasuries have rallied,\u201d Eric Orenstein, senior director at Fitch Ratings,<\/strong> said in a statement.<\/p>\n

\u201cWhile not enough for a full scale refi boom, an average 30-year rate approaching 6% does open up a meaningful slice of the market for refinancing. Mortgage originators stand to benefit, and will likely find the toughest times already behind them.\u201d<\/p>\n

\u201cGiven the anticipated rate cuts this week, the bond markets and 30-year mortgage rates have already reacted, and those rates have meaningfully come down,\u201d said Charles Goodwin, senior director of sales at Kiavi<\/a><\/strong>. \u201cI believe we need to see rates come down further before housing really picks up.\u201d<\/p>\n

According to JP Kelly, senior vice president of mortgage at MeridianLink<\/a><\/strong>, Wednesday\u2019s rate cut will give an immediate boost to purchasing power for potential homebuyers. But still-high home prices and limited amounts of available inventory may not mean much in practical terms.<\/p>\n

\u201cShort of an explosion of homebuilding to relieve inventory constraints, rates dropping to around the mid 5% [range] and negating the lock-in effect is our best hope for spurring real movement in the housing market,\u201c Kelly said.<\/p>\n

Keller Williams<\/a><\/strong> chief economist Ruben Gonzalez also expressed restraint in his expectations for home sales in the near term.<\/p>\n

\u201cWhile rates may continue to fall as the Fed provides more guidance on its future monetary policy, the majority of the adjustment in mortgage rates appears to have already been priced in,\u201d Gonzalez said. \u201cIn August, home sales remained sluggish, even with declining mortgage rates, signaling that buyers may still be cautious despite improved financing conditions.\u201d<\/p>\n

As the November election draws closer, interest rates have become more of a political issue. Republican nominee Donald Trump previously said he did not support<\/a> interest rate cuts prior to the election, while many Democratic lawmakers \u2014 including Sen. Elizabeth Warren<\/a> of Massachusetts \u2014 have voiced support for them. <\/p>\n

In response to a reporter\u2019s question about the political ramifications of Wednesday\u2019s rate cut, Powell stayed tight-lipped.<\/p>\n

\u201cThis is my fourth presidential election at the Fed and it\u2019s always the same,\u201c he said. \u201cWe\u2019re always going into this meeting in particular [the last one before the election] asking, \u2018What\u2019s the right thing to do for the people that we serve?\u2019 And we do that and we make a decision as a group.<\/p>\n

\u201cOur job is to support the economy on behalf of the American people. \u2026 We don\u2019t put up any other filters. I think if you start doing that, I don\u2019t know where you stop, and so we just don\u2019t do that.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve lowered its benchmark interest rate on Wednesday by 50 basis points (bps) to a range of 4.75% to 5%, turning an important corner in the central bank\u2019s fight against inflation.\u00a0The cut is the first since March 2020 after the Fed raised interest rates to a 23-year high point to cool the economy […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-58874","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nFed goes big, slashing interest rates by 50 bps - Houses Marketplace<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/housesmarketplace.trio-tv.com\/ru\/fed-goes-big-slashing-interest-rates-by-50-bps\/\" \/>\n<meta property=\"og:locale\" content=\"ru_RU\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed goes big, slashing interest rates by 50 bps - 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