August 1st, 2019
And the forecasts were on the money: yesterday, the Federal Open Market Committee decided to lower the federal funds rate by 25bps down to 2.00-2.25%, the first rate cut since 2008 (remember that crazy time?). The reasons for the cut is mostly due to economic uncertainties (think: trade wars, a slowing economic expansion, global tensions); however, the vote was not unanimous, with some committee members favoring keeping the benchmark rate untouched. The Committee had this to say about the decision: "This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain.”
Mortgage applications have fallen for three consecutive weeks, so many in the industry are hoping this move by the Fed will turn that around. Keep your eye on rates, but always stay focused on providing value through monetary and service benefits.