The Federal Reserve enacted its first rate cut since December with a quarter-percentage point lowering the target range for the federal funds rate to 4% to 4.25%.
The vote by the central bank’s Federal Open Market Committee was nearly unanimous. The only dissent was by Stephen Miran in his first participation on the committee since becoming a Federal Reserve governor on Monday, with a call for a half-percentage point rate cut.
In announcing the rate cut, the Fed noted that “growth of economic activity moderated in the first half of the year” while the “job gains have slowed, and the unemployment rate has edged up but remains low.” While the Fed has repeatedly sought to drive inflation down to 2%, the rate news announcement noted “inflation has moved up and remains somewhat elevated.”
In announcing the rate cut, the Fed added it “will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.”
For Real Estate, while the rate cut is good if we want to see lower mortgage rates, the reduction in the holdings of mortgage-backed securities by the Fed will have the opposite impact. The devil is in the details. Very interesting.
Happy there was a cut, was hoping for a half of a percent since we can’t adjust for 3 months. This should help the housing market.
I understand the quarter point in the current political environment yet obviously not enough. when we get to a 6-5.9 on the 30 year we will see buyers move in again. This year slowed down the sellers market.