A breakdown of what the Federal Reserve watches before cutting rates: inflation trends, unemployment numbers, and economic signals. The speaker walks through how these indicators might shift the timeline for rate cuts that could affect your mortgage.
When will the Fed cut interest rates? So the Federal Reserve has said all along they want to see CPI inflation get down to 2% year over year. Right now we're at 3.5%, but down from much higher numbers as you play out the next six months or so. Looks like if things go perfectly, inflation might get down to about two and a half percent. So it's positive progress. The Fed said they still might cut rates. They see positive progress, but it's not going to be soon that we get out of that 2% goal. The other factor that's coming into the mix is the unemployment rate. So that also shows weakness in the economy if people are losing their jobs. Unemployment has crept from 3.4% to 3.9%, and 17 out of the 19 total Federal Reserve members said they didn't think unemployment would ever reach 4.1%. So we're on the doorstep. If in the next month or so we see unemployment keep creeping up maybe to 4.1, 4.2, we might see rate cuts. On the June twelveth meeting.
