Rate Watch - The Fourth Quarter Is Here!

Mortgage and Lending with Watermark Capital NMLS #311662

The Fed paused rate hikes, as the markets were expecting. The markets were hung up on Fed Chairman Powell's speech where he indicated that rates would be higher for longer than originally anticipated. 

The market originally priced in a rate cut in Q2 of next year but now they don't think there will be one until Q3 or Q4. 

I, however, think Powell had to be hawkish in tone to not get markets excited. He knows that he can create the market reaction he wants without actually doing anything to policy. 

The part of his speech that I was most excited about was when he said that the Fed can finally "proceed carefully" with its policy decisions. This means that they now have the ability to make decisions based on the data and how they view the economy. They couldn't do that before.

Before, inflation was running so rampantly out of control that they had no choice but to raise rates very quickly (the fastest pace in history). 

But the Fed now thinks they are in a healthy enough position to make decisions based on the data and how they see fit. They think the economy is in a good place and want to see the effect of the previous rate hikes before implementing anything new. 

I personally think the Fed is done with their hikes. I said in the summer that we should have 2 more hikes and this September one was the 2nd one. Although the Fed left a November hike on the table I have a feeling it will be another pause. 

Future inflation data and jobs data will help determine the Fed's next moves. 

Here is what's in store for this week


  • Nothing Scheduled
  • New Home Sales
  • S&P Case Shiller Home Price Index
  •  Consumer Confidence
  • Fed Governor Bowman Speaks
  • Durable Goods Orders
Thursday Friday
  • Personal Income
  • Personal Spending
  • PCE Index (inflation: expect volatility with mortgage rates on this report)
  • Advanced Retail & Wholesale Inventories
  • Consumer Sentiment

Chart Check

We have been in a strong upward channel for the 10yr, which means that mortgage rates have climbed high since May. The chart looks poised to test the lower bounds of the channel, which could mean we see some relief soon. 

Markets are anticipating we finish the year with rates below 7% and below 6% in Q4 of 2024. My thesis remains the same where we will see manipulation of rates, to the downside, in time for elections next year unless some cracks in the system force the Fed's hand sooner. 

Here are the articles I wrote last week. You can view them all at www.loanwolf.org
That’s it for this week.
Posted by

Matt Brady

Branch Manager, NMLS ID#311662

(858)342-8659 cell |

8885 Rio San Diego Dr │ Suite 201  San Diego, CA 92108     


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Comments (3)

Roy Kelley
Retired - Gaithersburg, MD

Thank you very much for sharing this report.

Have a productive autumn.

Sep 25, 2023 08:26 AM
Matt Brady

Thanks Roy Kelley, I miss the term Autumn. I hope you have a great one.

Sep 26, 2023 08:50 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Matt and thank you for the great information in your blog that you are sharing with us.  Make it a great start to the week.

Sep 25, 2023 09:52 AM
Matt Brady
Watermark Capital - Del Mar, CA
One of San Diego's Best Lenders

Thanks Will Hamm, Maybe the 4th quarter will bring some relief.

Sep 26, 2023 08:49 AM