Shouldn’t have said that!
Sometimes you say something and you later regret having said it. Sometimes you think you are helping, but then say something that only makes things worse! We have all been in or seen that situation and understand how it happens. But when the person who says it is in a position of power, it can really have drastic consequences. In the past few days, we saw just that, the president was out on a campaign event and said that he was pretty sure the FED would be cutting rates soon. While he smiled, the markets knew that this was going to become an issue!
The FED has always tried to maintain at least the appearance of being apolitical and independent. The job is to navigate the economy without yielding to political pressure. While not easy, it becomes even more challenging in a presidential election year and it’s the president suggesting that rate cuts are soon to follow. The knee jerk reaction in the markets and likely the FED is to now anticipate even a longer pause in any potential rate cuts to give the appearance of not succumbing to political pressure from the president. When you add that to the surprising data we have seen over the last couple of weeks, future rate cuts may very well get pushed pretty far down the road. This week we have the jobs report on Friday and another strong report could significantly impact the markets even further than expected.
We also have seen a great deal of conversation about the NAR settlement across the board. I caution everyone to remember that NOTHING has been signed off by a judge yet, so we still have all the specifics going forward. While there is certainly a framework, it’s not a done deal. We also saw the first response from the mortgage side of the equation as FHA 2024-12 was published last week and said that from the FHA point of view, the seller may still pay the buyer’s agent if it is normal and customary in that market and that that it would NOT be considered part of a seller’s concession. So at least there is that. Clearly, there is much more to be addressed on that front down the road.
We have continuing and initial jobless claims today and the March jobs report Friday morning. Could certainly be market moving, so be aware and don’t be blindsided by the news! Questions or comments: [email protected]
