![]() Rates have swung in recent weeks as investors have digested a slew of data that shows the economy is resilient in some areas and softening in others.Īfter skyrocketing during the first part of the year, new mortgage payments came down slightly in July from June, according to a survey from the Mortgage Bankers Association. Up and down: Mortgage rates tend to track rates for the benchmark 10-year Treasury, which advanced last week. “But, amid waning demand, there are still potential homebuyers on the sidelines waiting to jump back into the market.” ![]() “Home sales continue to decline, prices are moderating and consumer confidence is low,” he said. The combination of higher mortgage rates and the slowdown in economic growth has been weighing on the housing market, said Sam Khater, Freddie Mac’s chief economist. Since then, concerns about the economy and the Federal Reserve’s mission to combat inflation have clouded the picture. That’s almost double where it was this time last year, my CNN Business colleague Anna Bahney reports.Īfter starting the year at 3.22%, mortgage rates rose sharply during the first half of the year, hitting a high of 5.81% in mid-June. The latest: The 30-year fixed-rate mortgage averaged 5.55% in the week ending August 25, up from 5.13% the week before, according to Freddie Mac. Mortgage rates jumped higher this week as investors tried to make sense of data that gave mixed signals about the health of the US economy. But given the time left on the clock for the situation to change again, investors shouldn’t expect Jackson Hole to yield a lightbulb moment. That indicates markets could be choppy in the coming weeks as traders try to pin down just how aggressive the Fed will be. ![]() Wall Street’s view: Investors now think that the likelihood that the Fed will hike rates by three-quarters of a percentage point for a third consecutive meeting is over 60%. ![]() “They are just as uncertain about these things as we are.” “I don’t think we should try to read too much into whatever is said at Jackson Hole,” Bianco said. It’s expected to show that core inflation, which strips out volatile food and energy prices, ticked down to 4.7% in July from 4.8% the previous month. The most recent edition of the Personal Consumption Expenditures Price Index, which is the Fed’s preferred measure of inflation, hits later this morning. 20 and 21 hinges on the economic numbers due to arrive in the coming weeks, including the August jobs report and the latest Consumer Price Index. In short, the Fed’s decision at its next meeting on Sept. “The pace of those increases will continue to depend on the incoming data and the evolving outlook for the economy.” “We anticipate that ongoing increases in the target range for the federal funds rate will be appropriate,” Powell said in late July. The S&P 500 is up about 15% from its June low.īut when Fed officials have actually talked about their plans, they’ve made clear that they’re in wait-and-see mode. That’s the big reason US stocks have rallied this summer. Consumer prices rose 8.5% in the year to July, down from 9.1% in June. Investors have been increasingly hopeful that the Fed could ease up from here, especially after inflation slowed slightly last month. At its past two meetings, it’s hiked interest rates by three-quarters of a percentage point, an unprecedented move in the central bank’s modern history. ![]() Quick rewind: The Federal Reserve started raising interest rates in March in a bid to bring down inflation. “But they don’t have clarity themselves on it.” “Because we’re uncertain, we’re desperate for some kind of signal from the Fed,” David Bianco, Americas chief investment officer at DWS, told me. The problem? The Fed itself has indicated that it doesn’t know yet. Wall Street will be hanging on to Powell’s every word for clues about just how big the Fed’s next rate hike will be. The big event for investors on Friday is in Jackson Hole, Wyoming, where Federal Reserve Chair Jerome Powell will speak about the economy at a gathering of central bankers. ![]()
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