Did The Rate Cut Already Happen?

CLIENT ADVICE
Markets Likely Baking In The Cut

Are we getting ahead of ourselves?

“Futures traders are now completely convinced that the first rate cut will come by mid-September, assigning a probability of 100 percent odds that the Fed will have cut rates by at least a quarter percentage point by then, according to data from CME Group.” - This might be accurate for the Fed Funds rate, but not mortgages.

I think the movement we have seen over the last 8-9 weeks has already baked in the September cut. Once it became clear that it would likely happen, markets reacted. This could be a huge build-up to a mortgage consumer letdown.

Rewinding and zooming out, we’ve already effectively experienced a .25% “rate cut.” Be careful in thinking that we will see a movement downward into the low 6’s.

And yes, as I type this, I REALLY hope I am wrong, and we have a monster movement downward.

This, of course, would cause a whole new set of problems for us… lol

Also Read: Don’t confuse the Fed Funds Rate with long-term debt, like mortgage rates.