"That stability is largely being driven by the high likelihood of two more rate cuts this year by the Federal Reserve. The Federal Open Market Committee finishes its two-day October meeting on Wednesday, and the CME Group's FedWatch tool shows that interest rate traders are placing 97% odds on a 25-basis-point cut. Nearly 90% of traders believe there will be a second 25-bps cut in December, which would bring the federal funds rate to a range of 3.5% to 3.75%."
"Benchmark rates haven't been that low since September 2022, when the Fed was deep into a series of rate hikes to combat 40-year-high inflation. While inflation has come back to earth in the ensuing three years, it has started to rise again in recent months. The Consumer Price Index for September, released last week, posted a 3% annual gain. It was highest inflation rate for 2025 and the third straight month with an increase."
"Yuval Golan, founder and CEO of real estate investment platform Waltz, said that Fed Chair Jerome Powell and other policymakers are keeping a close eye on inflation, and that near-term rate cuts are not a guarantee. One thing we do know is that Powell and others at the Fed have approached inflation with caution, trying to walk a tightrope of keeping the economy moving without overheating it, Golan said."
Mortgage rates have held relatively stable in recent weeks as markets price in two likely Federal Reserve rate cuts this year. Traders place about 97% odds on a 25-basis-point cut in October and nearly 90% on a second cut in December, potentially lowering the federal funds rate to 3.5%–3.75%. Benchmark rates have not been that low since September 2022. Inflation has reaccelerated recently, with the September Consumer Price Index up 3% year-over-year. Fed officials, including Chair Powell, remain cautious and could pause cuts pending budget developments and additional economic data. A government shutdown has constrained access to fresh employment data.
Read at www.housingwire.com
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