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Top Fed Official Backs Jul. Rate Cut
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Trump fires housing market accusation at Powell's Fed
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The case for a U.S. interest rate cut remains unresolved as Federal Reserve officials head into their policy meeting later this month, with data showing fresh signs of higher inflation and President Donald Trump intensifying his demands for lower borrowing costs.
“With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate,” he said. “I believe it makes sense to cut the (Fed’s) policy rate by 25 basis points two weeks from now.” (Twenty-five basis points equals one quarter of an interest rate point.)
July 18 mortgage rates hold steady at 6.625% as builders offer discounts and incentives to attract hesitant buyers.
Interest rate swaps create cash flow stability for borrowers at a lower interest rate than if they had entered into a fixed-rate loan directly. At the same time, lenders are guaranteed to get their payments at the floating market rate.
Financial markets are betting the Federal Reserve sticks to its "wait and see" approach to interest rates this summer, but that by September it will have waited and seen enough to start cutting borrowing costs.
Major Wall Street brokerages have withdrawn their expectations for a September interest rate cut by the Bank of England, as inflation remains sticky and the labour market resilient.
With the Federal Reserve's July meeting on the horizon, many prospective homebuyers and homeowners are wondering what it could mean for mortgage rates. After years of relatively high borrowing costs, even the slightest dip could open doors for those hoping to buy or refinance. But the path forward is far from clear.
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