In June 2024, the Federal Open Market Committee (FOMC) is set to meet on June 11-12, amidst a backdrop of high inflation and rising interest rates. The chance of an interest rate cut on June 12 is currently at a mere 0.1%, according to the CME’s FedWatch Tool. Fixed income markets project that September could be when the first interest rate cut of this cycle takes place with a roughly 50% probability, followed by a potential second cut in December. The Federal Reserve Chair Jerome Powell is expected to provide further insights during his press conference on the likely direction for monetary policy. At the last FOMC update on March 20, two or three interest rate cuts were forecast as the most likely outcomes for 2024 by policymakers. As of June 6, mortgage rates dipped just under 7% after crossing above that threshold in the prior reading, as rates remain stubbornly high and continue to stifle the housing market. The Federal Reserve’s monetary policy committee is scheduled to release its latest policy statement on June 12, along with the Consumer Price Index (CPI) report, which could potentially influence mortgage rates. If inflation as measured by the CPI is lower than expected, mortgage rates could fall. Conversely, if it is higher than expected, mortgage rates could rise. The uncertainty surrounding these upcoming events has led to potential volatility in mortgage rates. In the first half of June, however, mortgage rates are expected to remain relatively stable.
In the context of a turbulent economic environment and high inflation rates, the FOMC meeting and the CPI report on June 12 will play a crucial role in determining interest rate decisions and their impact on mortgage rates. The Federal Reserve's monetary policy committee has increased its benchmark federal funds rate eleven times throughout 2022 and 2023, raising it from nearly 0% to the range of 5.25% to 5.50%. Mortgage rates tend to increase when the Fed rate rises.
The housing market has been significantly impacted by high mortgage rates and rising home prices. The median monthly mortgage payment on new home purchases is now $2,256, up almost 7% from a year ago. As mortgage rates remain high and volatile, consumers may face continued challenges in the housing market.
In summary, the upcoming FOMC meeting and CPI report on June 12 will be crucial in determining interest rate decisions and their impact on mortgage rates. The Federal Reserve's monetary policy committee has increased its benchmark federal funds rate eleven times throughout 2022 and 2023, leading to higher mortgage rates. The housing market is currently facing significant challenges due to high mortgage rates and rising home prices, with the median monthly mortgage payment at $2,256 - up almost 7% from a year ago. As of June 6, mortgage rates have dipped just under 7%, but uncertainty surrounding upcoming economic events could lead to potential volatility in mortgage rates.