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Feds still not budging on the discount rate

By
Mortgage and Lending with D A Griffin Financial.LLC NMLS 6380

Feds still not budging on the discount rate

Not unsurprising, the Feds' Powell announced no change in the discount rate for this month.  For that matter, the projection is for just one reduction in the discount rate for 2024.  

 

According to Powell, whereas there was some news that would be encouraging for a reduction in the discount rate, it is not enough.  Powell says the fact the Feds have pulled back on the discount rate reductions for 2024 (one cut vs three), it could just mean more cuts in 2025.  

The two biggest factors affecting stubborn inflation numbers are rental prices and auto insurance.  Most folks with car insurance can attest to the rapid increase in insurance premiums.  One would think eventually it would peak. 

 

Until the Feds see reasons for reducing the discount rate, our long term interest rates appear to stay elevated.  When the discount rate drops, it does not mean the same reduction in long term interest rates, it simply implies the economy is slowing; that in turn will affect long term rates.  Today, that appears to be not happening in 2024, however, change seems to be eternal with these matters, so stay tuned.

 

 

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

We need changes

Jun 12, 2024 01:27 PM
Dora Griffin

Agree, it feels like the Feds are waiting too long to drop, just as they waited too long to raise.  Have a great day!

Jun 13, 2024 07:12 AM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

Holding firm unfortunately. Home Buyers could use a dip in the mortgage rate...hopefully before the end of the year.

Jun 12, 2024 10:16 PM
Dora Griffin

You are so right, homebuyers could use lower rates, especially the buyers at the lower end of pricing.  Have a great day!

Jun 13, 2024 07:10 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Jun 13, 2024 03:33 AM
Dora Griffin

Thanks, Richard.  You as well, it's going to be a little warm here today, but not like TX!  

Jun 13, 2024 07:11 AM