The Federal Reserve is holding off on rate cuts as it watches how new tariffs could affect inflation. With key tariff deadlines shifting and markets on edge, here’s what we are seeing now:
- The Fed held rates steady in June and is signaling possible cuts in 2025, but timing is uncertain due to inflation and economic data.
- The Fed wants to see how new tariffs impact inflation before making any rate cuts.
- A key tariff deadline was pushed from July 9th to August 1st, making that date one to watch.
- Proposed tariffs include 25% on certain sectors and up to 70% on imports from countries like China, India and Brazil, adding tension to global markets.
- Investors are moving into safer assets like US Treasuries, pushing interest rates slightly lower.
- The 10 year Treasury yield is around 4.35% and markets expect the Fed to start cutting rates, about 0.50% total, in October.
This week we saw the Producer Price Index wholesale inflation figures and they were better than expected, however there were revisions to the previous month. Both the PPI and the CPI (consumer price index) showed that inflation is still pretty modest but still higher than the Fed wants to see.
If you are wondering if a rate check or a preapproval update may benefit you, please reach out! I have talked to some clients that bought a year or two ago and for some, a refinance may make sense, especially if you are carrying a lot of credit card debt. Feel free to reach out and we can have a conversation to see if a refi may help you.
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
