After the nation’s worst price hike crisis in 40 years, inflation is down to 2.1%. That’s just a tick above the Federal Reserve‘s long-standing inflation goal of 2% annually. The central bank celebrated by delivering a supersized cut in the federal funds rate, the rate at which banks are charged for overnight borrowing from lenders of last resort.
Colloquially, the financial commentariat will say the Fed “sets” interest rates, and in this case, it theoretically slashed them. But as evidenced by the unrelenting mortgage market, there are limitations to how the Fed’s rate cuts for banks translate into lower borrowing costs for consumers.
Since the Fed’s first rate cut in nearly half a decade at its final meeting before the 2024 election, the 30-year fixed mortgage rate average rose from its two-year low of barely 6% to more than 6.5%. Mortgage rates should be…
