Jason HartmanCEO of Empowered Investor and Real Estate Tools

How War Reduces Mortgage Interest Rates!

Name: How War Reduces Mortgage Interest Rates!
Uploaded: 2023-10-13T17:36:24+00:00
Duration: 45 s
Channel: Jason Hartman
Description: In this excerpt, the speaker explains that during crises central banks typically loosen the money supply, which reduces the cost of borrowing and leads…

13 Oct 2023 · 1 min

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In this excerpt, the speaker explains that during crises central banks typically loosen the money supply, which reduces the cost of borrowing and leads to lower interest rates. He notes that the Federal Reserve has paused its aggressive rate hikes and that this environment may accelerate a Fed “pivot” toward easing policy, which would bring down mortgage rates and broader borrowing costs. The speaker also highlights that crises cause consumers to save rather than spend, creating pressure on the Fed to stimulate the economy, thereby reinforcing the move toward lower rates.

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Now, another element we've got to look at is interest rates. In times of crisis, the central banks tend to loosen the money supply, they tend to reduce the cost of money and lower interest rates. We've been waiting a while for a Fed pivot, and a lot of people thought it would happen much sooner, including yours truly. This will probably speed up the idea of a Fed pivot. We know that the Fed has really stopped their ridiculous increases, but this is more likely to put pressure on them to pivot sooner rather later, to see lower mortgage rates, lower interest rates throughout. Because in times of crisis, people get concerned. They tend to save, not spend. They tend to hunker down. And the Fed needs people stimulating the economy.