I’m sorry, were you waiting to return to the happy days when you could get a 30-year fixed mortgage for less than 4%? Well, you might have to tighten the straps on your patience hat again because Ms. Yellen of the US Treasury said this week that rates will most likely not go back to pre-pandemic levels.
Ever since the Fed nudged the rate up the last time (July 2023) expectations have been building for when and how fast they would come down again, implicitly (and suspected erroneously) assuming that “down” meant all the way down to where they were before.
Secretary Yellen pointed out that the latest rate projections are aligned with what market forecasters are thinking.
Also, debating where rates will settle might be a little premature as we have yet to see any of the big Western central banks (Fed, ECB, BoC, or BoE) cut a single rate.
While growth is flattening and there is a lot of technical recession going around, inflation still has to make it into the target band or even be on a steady course there.
Over the coming weeks the rate deciders will get together again, though odds are the outcome will be another “too soon.”
Regitze Ladekarl, FRM, is FRG’s Director of Company Intelligence. She has 25-plus years of experience where finance meets technology.