Wednesday was the “Fed Day” – the end of the two day meeting and as expected the Fed didn’t adjust rates at all. However we did see mortgage rates improve which was a welcome relief! So what happened?
The bond market has been slowly improving over the past few days but Wednesday saw a huge improvement. We’ll see if it continues! The press conference with Fed Chairman Powell was received well. There wasn’t much of a change from his previous comments but that was expected. The Fed is watching employment numbers and inflation reports. As long as the economy looks strong, they will keep rates where they are or talk about increasing them. For now, most of the reports seem to say that the Fed may be done raising rates but it does depend on economic reports.
The big changes on Wednesday were the economic reports. The data was either in line with expectations or weaker and that helps interest rates. The JO:LTS report showed job openings rose from 9.5 million to 9.55 million and the previous month was revised lower. The hiring rate stayed the same. The ADP employment report showed there were 113,000 jobs created during October which was lower than the 150,000 jobs expected. The job market is cooling according to ADP. The big question now is what the jobs report will show on Friday.
No one expects the Fed to start dropping rates until sometime later in 2024. The estimates for interest rates for 2024 is staying close to where they are now and hopefully dropping to around 7% by the end of 2024. Earlier this year, we expected rates to be much lower by the end of 2024. We’ll see what happens as no one really knows for sure. As I frequently say when I get asked about rates, my crystal ball is a bit foggy! It’s one question that no one can answer and any day there can be news that changes the direction of rates!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
