Mortgage Rates Due to Slide After Fed Guidance Catches Market Off Guard
The Federal Reserve’s first cut to the federal funds rate in more than a decade came as no surprise to investors, but comments by Chairman Jerome Powell afterward caught enough of them off guard to send equity markets down, followed by bond yields – an indication that mortgage rates are due to slide as well.
Investors were expecting the chairman to suggest that this rate cut was the beginning of more to come, a move that would create increasingly accommodative conditions for businesses. Powell stopped short of that, however.
Wednesday’s market changes capped a week in which mortgage rates ticked up slightly; bond markets were largely quiet despite a consistent dose of influential economic data, moving only in response to Thursday’s news from the European Central Bank.
Now, as expectations shift, both the Fed’s and the market’s respective attentions will turn to the slew of important economic data releases due in the coming days – particularly July’s jobs report, which is due Friday.
