WEDNESDAY AFTERNOON UPDATE:

 

 • The eighth FOMC meeting of the year has adjourned with an announcement of a quarter-point reduction in key short-term interest rates. This was the third consecutive cut and was widely expected because of stability concerns about the employment sector.

 • Today’s decision was not unanimous. For the first time since 2019 three members voted against the decision. Two members wanted to leave rates unchanged out of concern that inflation may still be an issue and the third preferred a half-point cut.

 • The so-called dot plot released today indicates the Fed members are currently predicting one rate cut next year.

 • We also got revised economic projections from the Fed today. They now feel the economy will grow at an annual rate of 1.7% this year (GDP), up slightly from the previous estimate of 1.6% and 2.3% next year.

 • Their prediction for the unemployment rate is to close this year at 4.5% (currently 4.4%) and 4.4% for 2026.

 • Inflation is now likely to be at 3.0% at the end of 2025 and falling to 2.5% next year according to their forecasts.

 • None of these economic revisions are significant enough to cause much concern or joy in the bond market. Slower GDP growth and softer inflation are theoretically favorable for bonds and mortgage rates, but a lower unemployment rate would be bad news.

 • Overall, we have seen a slightly favorable reaction to this afternoon’s events. The bond market is currently up 7/32 (4.16%), which is enough of a move from this morning’s level for some lenders to issue a minor intraday improvement to rates. Others may wait to see what overnight trading and tomorrow’s opening brings before making that adjustment.

 • Stocks are rallying with the Dow up 542 points and the Nasdaq up 94 points. Both are much better than where they were this morning.

 • The 3rd Quarter Employment Cost Index (ECI) was released earlier today, revealing a 0.8% increase. This means employer costs for wages and benefits rose during the July through September months. It was a tad softer than the 0.9% that was expected.

 • Tomorrow’s sole relevant economic data will be last week’s unemployment figures at 8:30 AM ET. They are expected to show 217,000 new claims for jobless benefits were made, up from the previous week’s surprise 191,000 that was the lowest since 2022. Rising claims are a sign of weakness in the employment sector, so a larger than predicted number would be good news for mortgage rates.

 • Also tomorrow is the 30-year Treasury Bond auction. As with yesterday’s 10-year Note sale, this will give us an idea of investor appetite for long-term debt. Results will be posted at 1:00 PM ET. A strong demand from investors could lead to bond gains and a downward revision to mortgage rates tomorrow afternoon.

 • Visit our Daily Commentary page on our site for detailed explanations on current news that is relevant to mortgage rates.

 

 

 

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If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.