On The Road To Rate Cuts, Markets Asking "Are We There Yet?" (Spoiler Alert: No)

Back in late 2023, we got in the car with the Federal Reserve with the promise of a trip to our favorite place: the land of lower interest rates. In 2024, we keep asking "are we there yet?" The more we ask, the farther we seem to be from the destination. This trip began with all the best intentions. Softer inflation and cooler economic data led the Fed to expect an opportunity to cut rates several times in 2024. The Fed communicated as much in mid-December. Markets took things a step further with futures contracts pricing in 6 cuts by the end of the year. "6 rate cuts" was a refrain that echoed throughout the mortgage and housing industries. Suddenly, too many people were risking disappointment by not understanding the HIGHLY conditional logic behind the 6 cut mantra. It wasn't necessarily a mistake for the market to get so far ahead of the Fed's official outlook. After all, the Fed has a history of cutting rates MUCH faster than its projections suggest. But the decision would ultimately be dependent on continued progress on inflation, and more economic cooling. With the release of this week's inflation data, we now have two consecutive months that raise serious objections to the notion that the Fed will be able to cut any time soon. This is a chart of the core Consumer Price Index (CPI) in year over year terms. This is the inflation metric that the Fed wants to see at 2% and they've been clear in saying they can cut rates if they're confident that we'll get there. It shows clear, substantial progress toward that goal:

March 15, 2024 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch On The Road To Rate Cuts, Markets Asking "Are We There Yet?" (Spoiler Alert: No) Back in late 2023, we got in the car with the Federal Reserve with the promise of a trip to our favorite place: the land of lower interest rates. In 2024, we keep asking "are we there yet?" The more we ask, the farther we seem to be from the destinat... (read more) MBS Commentary No Help From Data Today This morning's line-up of econ data is certainly not the most relevant to the bond market, but the NY Fed Manufacturing index has registered an impact at times. This is not one of those times. While volume suggests traders waiting to make... (read more) Rob Chrisman Non-QM Secondary, TPO, Servicing, General Ledger, Marketing Products ; Events and Training Just once, I want a username and password prompt to say, “Close enough.” Speaking of technology, this weekend Robbie and I head to Las Vegas for the ICE Experience 24 events (led off by the Lender Toolkit Supercar Experience). One big topic is bound ... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.09% +0.07% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.09% +0.07 0.00 15 Yr. Fixed 6.60% +0.05 0.00 30 Yr. FHA 6.60% +0.10 0.00 30 Yr. Jumbo 7.38% +0.05 0.00 7/6 SOFR ARM 6.78% +0.09 0.00 30 Yr. VA 6.62% +0.10 0.00 Updates Daily - Last Update: 3/15 15 Yr. Fixed Rate 6.60% +0.05% Rate Change Points Freddie Mac 30 Yr. Fixed 6.74% -0.14 0.00 15 Yr. Fixed 6.16% -0.06 0.00 Updates Weekly - Last Update: 3/14 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.84% -0.18 0.65 15 Yr. Fixed 6.37% -0.29 0.77 30 Yr. Jumbo 7.04% -0.17 0.38 Updates Weekly - Last Update: 3/13 MBS / Treasuries UMBS 30YR 5.5 98.83 -0.19 Price / Yield Change MBS UMBS 5.5 98.83 -0.19 UMBS 6.0 100.41 -0.16 GNMA 5.5 99.20 -0.23 GNMA 6.0 100.39 -0.22 Pricing as of: 3/15 5:31PM EST 10 Year US Treasury 4.3080 +0.0160 Price / Yield Change US Treasury 2 YR Treasury 4.732 +0.038 5 YR Treasury 4.327 +0.033 7 YR Treasury 4.328 +0.023 10 YR Treasury 4.308 +0.016 30 YR Treasury 4.431 -0.004 Pricing as of: 3/15 5:31PM EST Latest Video Redfin CEO reacts to NAR's $418 million commission lawsuits settlement Does the Fed still have room to cut rates amid recent inflation data? Seeing positive signs in the commercial real estate sector, says Rudin Mana... Public homebuilders will continue to gain market share, according to UBS an... Around the Web Marketwatch No more 6%? Home buyers and sellers will soon negotiate their own commissions with agents. CNBC Here's when the Fed is likely to start cutting interest rates, according to investment strategists CNBC Treasury yields mixed as investors fret over interest rate outlook Calculated Risk Blog Realtor.com Reports Active Inventory UP 21.7% YoY; New Listings up 15.8% YoY Calculated Risk Blog GDP Tracking: Around 2% Eye on Housing Strong Rebound in Single-Family Permits at the Start of 2024 Calculated Risk Blog Part 2: Current State of the Housing Market; Overview for mid-March 2024 Eye on Housing Rising Auto Loan Debt, Declining Student Loans for 4Q23 CNBC This week provided a reminder that inflation isn't going away anytime soon Calculated Risk Blog Industrial Production Increased 0.1% in February Calculated Risk Blog 3rd Look at Local Housing Markets in February CNBC Renters face a competitive spring market: What to know about 3 kinds of properties you may see Eye on Housing Producer Prices Up in February

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