We’re not sure who creates the calendar for Federal Reserve meetings, but didn’t they notice there was a presidential election just days before it and might get lost in the shuffle?? Do you think it might be overshadowed? There was obviously a lot of headline-making and policy-making news last week, and the markets had much to digest. So what happened, and where do the markets go from here?

Anyone who tracks their investments probably saw their account balances rise as the stock market was eager to look forward toward what it views as a growth environment, but anyone in bonds knows that with growth comes the fear of inflation. We saw bonds react accordingly, sending mortgage rates higher.

The Federal Reserve Open Market Committee (FOMC) met last Wednesday and Thursday resulting in a widely expected .25% rate cut to the overnight lending rate (Fed Funds Rate). The key term in this statement is widely expected — markets had priced this cut in, therefore we did not see mortgage rates fall on the news. 

So, the crystal ball question is, “Where do they go from here?” Our Key Mortgage crystal ball is in the shop, but here’s a summary of what experts have (not had) to say:

1. Consensus is a further .25% Fed Feds rate cut in December.

The committee meets one last time on December 17 and 18, and it is projected that they will impart another .25% rate cut and then sit back and see how these cuts move through the economy

2. Mortgage rate predictions are not holding. 

It’s not surprising that forecasts for rates to be in the mid-5s by now have not materialized. In fact, they have jumped up from the lows in mid-September, hovering in the high 6s (30-year rates). Now, with the election behind us and strong economic data, there will be a whole slew of predictions that may (or may not) hold true.

3. Markets will trade based on rumors, and make corrections based on data.

Any change in economic policy will come next year, but markets will always trade on the prediction of what is to come and then settle up once the data bears it out. Current economic data — which has shown itself to be producing lower inflation and steady employment numbers — is all good for stable interest rates. It’s the future projections that will cause the market to peak and valley.

Uncertainty can play havoc with those trying to time a market, which is why leading your clients with a steady hand through buying or selling is more critical than ever. We all know deciding to buy or sell a home is not just a financial one, and while financing is a huge factor, it’s never the only one. Having a team of professionals to help guide and educate you and your clients has never been more important. It can be the differentiator between you and your competition and the foundation to expanding your sphere.

As we embark into 2025, take us up on our offer to bring your clients a true consultation on the best path forward — both now and in the future.