09/02/2025
WEEK IN REVIW 08/29/2025
Hello, this is Daniel Mackey with your weekly market update.
The key economic news this week was the release of Core PCE, the Fed’s preferred inflation measure. It showed prices rose 0.3% from June to July and 2.9% year-over-year, right in line with expectations.
Why does that matter? The Fed’s main job is to manage inflation while supporting the labor market. If inflation stays high, they’re less likely to cut interest rates. But if the economy shows signs of slowing, a rate cut becomes more likely.
Fed Chair Jerome Powell recently said they’re getting closer to cutting rates, depending on incoming data. Since this latest inflation report didn’t bring any surprises, it keeps a potential rate cut on the table for the Fed’s next meeting on September 17. Now, the focus shifts to the August jobs report coming out September 5.
Quick refresher: When the Fed adjusts interest rates, they’re changing the Fed Funds Rate, a short-term rate for bank-to-bank lending. This rate influences interest rates throughout the economy, but it doesn’t directly determine mortgage rates or other long-term rates.
Turning to housing news, signed contracts for both new and existing homes dipped slightly from June to July. But keep in mind, that was before mortgage rates started trending lower. If rates continue to decline, we could see an uptick in buyer activity soon. Also, home prices are still up compared to a year ago, although the pace of appreciation has cooled a bit. If demand picks up again, we could see price growth start to accelerate.
Thinking about buying, refinancing, or just have questions? I’m happy to help – reach out any time!
