There’s been a lot of hype around rumored interest rate cuts over the last couple of months.
Late last year, many news outlets were predicting up to 6 rate cuts by the federal reserve in 2024. As inflation continues to come down, many have been optimistic that the federal reserve would start to ease up on rates.The Motley Fool reported on Christmas day of last year that, “Relief is on the way. According to Wall Street experts, the U.S. Federal Reserve is poised to cut interest rates six times in 2024.”
A reduction in interest rates by the Federal Reserve would likely bring down mortgage interest rates. Though not directly tied, mortgage rates tend to move in the same direction as the federal funds rate.
Despite all the optimism, Fed Chairman, Jerome Powell has not given a clear indication on what to expect. He has hinted towards cutting rates but has been emphasizing the want to see more data pointing towards prices being stabilized before initiating rate cuts.
Jobs data early this month showed many more jobs being added to the economy than what was expected in January. Although in many ways this is good news, it’s counter to what the Federal Reserve wants to see before starting to cut rates. Federal Reserve Officials have been lowering rate cut expectations as they continue to remain cautious. However, it seems likely we will see rate cuts but it’s unclear how many will actually happen.