Portland Mortgage Market Update — September 27, 2024

The market continued to digest the Fed rate cut this week, with some surprising impacts from foreign markets. As we get further and further away from last Wednesday's Fed rate cut, it become more apparent that the market assumed they would take a more aggressive stance in lowering rate through the rest of the year. Alas, they weren't and rates trended higher at the end of last week, then were again pumped up by news out of China that their central bank issued their most aggressive stimulus since the pandemic. This was viewed as possibly inflationary, and fears of it bolstering global inflation pushed our mortgage rates higher.

Today's PCE report was a welcome reprieve, however, coming in below the market forecast. This paves the way for future Fed rate cuts and the market is now split 50/50 if the Fed will cut another 50 basis points at their next meeting in November which would set us up for a total of 125 basis points in cuts this year. It appears that inflation is well in hand, and with the Fed's dual mandate it puts all the focus on the labor market.

And the timing couldn't be better, as next week is jobs week! The Jolts report is Tuesday, ADP report on Wednesday, Initial Jobless Claims on Thursday and the BLS Jobs report on Friday. This has the potential to be very impactful on the market and could lead to much lower rates.