Powell Stays, Oil Shifts, Rates Uncertain
Unprecedented Fed Shifts and Global Oil Shakeups
Happy Friday! It’s Brian Manning here with your weekly update. We have a massive amount of ground to cover this week, so let’s jump right into the highlights.
A Historic Shift at the Federal Reserve
This week marked Jerome Powell’s final meeting as Fed Chair, but it came with a major twist. Powell announced he isn’t leaving the Federal Reserve entirely; instead, he will stay on as a Governor.
In the history of the Federal Reserve, this has only happened twice before—once at the request of the President, and once back in 1916. This is essentially unprecedented in the modern era. Having a former Chair remain on the board will undoubtedly make Kevin Warsh’s transition more complex. Even if Powell is not a voting member, his influence will still be felt within the Fed. We’ll have to wait and see how that dynamic plays out.
UAE Steps Away from OPEC
In global news, the UAE has officially announced it is stepping away from OPEC. For a long time, the UAE has felt that OPEC’s production caps—which currently limit them to about 30% of their capacity—have held them back.
By exiting, the UAE regains full control over its oil production. This move allows them to “beef up” supply, which could have a significant impact on global oil prices. Additionally, they are seeking alternative transit routes for their oil, likely via pipelines, to reduce reliance on the Strait of Hormuz.
Inflation Gauges and the Road Ahead
We also saw the release of the latest PCE (Personal Consumption Expenditure) numbers—the Fed’s preferred gauge for inflation. The numbers came back higher than previous months, which wasn’t entirely unexpected.
What is interesting is the shift in philosophy we expect to see with Kevin Warsh taking the helm. It has often felt like the Fed under Powell was “driving the car while looking through the rearview mirror.” Warsh has indicated a desire to look through the windshield instead, focusing more on forward-looking data.
Impact on Mortgage Rates
So, what does this mean for mortgage rates? Lately, we’ve seen rates move in a volatile “up and down” pattern, though they have maintained a somewhat consistent baseline. We enjoyed a nice run of lower rates earlier this year, but the ongoing conflict in the Middle East has pushed them back up. We are monitoring the situation closely to see how future data impacts the market.
Local Events & Announcements
- Bolder Boulder Party: Our annual party is coming up! It’s always an amazing time at our house, and we’d love to see you there. No need to RSVP—just show up and enjoy.
- “Just List. Just Sell. Just Win.” Series: Our classes for real estate agents are moving fast! The Colorado Springs session is officially sold out. Our next class is in Boulder next week, and it is also nearing capacity. If you want to attend, please RSVP as soon as possible.
I’m around all weekend if you have any questions. Have a fantastic Friday and a great weekend!
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