07/22/2024
In this week’s economic new, Fed Futures suggest a 100% probability of a cut by September. How big? Many believe 25 basis points cut is due. There is a lower probability of a half a point cut on the table but things can change. The Fed did state that they would not wait until inflation falls to 2%. At this time PCE inflation sits near 2.57% based upon readings from a few months ago. Shelter and Rents continue to trend lower, and with data lagging we see this as favorable news to further support a reduction of inflations rate of rise aiming toward that target 2% helping support this first cut in two years.
In the job market Continuing claims –which are unemployment benefits appear to be rising. This means workers are exhausted their benefits without finding new jobs. Initial claims which signal new unemployment claims also rose. These benefits initially cover 6 months.
This information is Important to the FED because it shows the economy is slow out there as it is harder to find new jobs. Growth continues to decline, signaling a further weakening economy.
In summary, now is the time to strike if you are waiting to purchase. Taking advantage of higher inventory levels give a buyer leverage for a better purchase price and more seller incentives. Once rates begin to fall, demand for housing will rise, which will create more competition, pushing up prices and pulling those great incentives back from the market.
If you are looking to buy, sell, or refinance, and world class advisory, don’t hesitate to reach out.
