Federal Reserve Cuts rates, Sending Mortgage Rates to 2025 Low
WASHINGTON – The federal Reserve on Wednesday cut interest rates by 25 basis points, a move that has already driven mortgage rates to their lowest level this year. The decision comes amid growing concerns about a slowing economy and persistent inflation,creating a complex challenge for central bankers.
The Fed’s move aims to balance controlling inflation with maintaining employment. However,both inflation and unemployment are currently rising – an unusual economic condition that complicates the central bank’s strategy. Recent jobs data indicated the U.S. added just 22,000 jobs in the latest report, considerably less than the projected 75,000, with declines particularly noticeable in sectors sensitive to economic policy, such as federal government jobs and wholesale trade.
According to NerdWallet, mortgage rates could continue to ease thru late fall and winter, though a “slow, steady decline” is more likely than a dramatic drop.Analysts predict the Federal Reserve will vote to cut rates again in October and December, by another 25 basis points each time.
If these predictions hold true, mortgage rates could fall by approximately 50 basis points by the end of 2025, potentially dipping below 6%. the weekly average 30-year rate has not been below 6% as september 2024.
Taylor Getler writes for NerdWallet. Email: tgetler@nerdwallet.com.
This article originally appeared on NerdWallet.
