Fed Preps September Cut
Happy Friday and happy Labor Day weekend! I hope you’re able to relax and enjoy the holiday.
This week brought some meaningful updates for the housing and financial markets.
At the end of last week, Federal Reserve Chair Jerome Powell spoke at the Jackson Hole symposium and, for the first time in a while, acknowledged that the labor market is weakening. His comments paved the way for a potential rate cut at the Fed’s September meeting. While it’s unlikely we’ll see a big move of 50 basis points or more, a quarter-point cut (0.25%) is very possible.
On Tuesday, the Case-Shiller report showed that home appreciation for June was up 1.9% year-over-year. While appreciation has slowed, values across the country are still in positive territory.
Thursday’s unemployment data confirmed Powell’s concerns. Initial jobless claims rose to 229,000, while continuing claims remained near 1.95 million. An estimated 900,000 people have now exhausted their unemployment benefits and remain jobless, another sign of weakness in the labor market.
Finally, Friday’s PCE inflation report—the Fed’s preferred gauge—showed modest increases. But a large portion of the rise came from portfolio management fees, which isn’t truly inflationary. Once again, these reports highlight the difficulty of getting an accurate read on inflation’s real impact.
What this means for you:
If the Fed does follow through with a September rate cut, mortgage rates could finally begin to ease. That shift would open up opportunities for buyers and homeowners considering a refinance.
As always, I’ll be available all weekend, 8 a.m. to 8 p.m., if you have questions or want to discuss what this means for your situation.
Realtors – don’t forget:
- Our brand-new class, Winning with Objections, is happening next Thursday at Angelo’s Taverna in South Denver. RSVP now to secure your spot.
- Save the date for our 11th Annual Fall Fiesta on Thursday, November 13th at Roots Music Project in Boulder. Expect incredible live music, an open bar, and all-you-can-eat tacos. Seats are already halfway sold out, so RSVP soon!
Wishing you a great holiday weekend!
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