Weekend Market Update 9.21.2024

This week, the rate market really showed its strength by anticipating both the Fed’s rate cut and the updated outlook as shared in the summary of economic projections (SEP). The SEP includes the well-known "dot plot," which illustrates each Fed member’s expectations for where the Fed Funds Rate is headed over the next few years. Typically, this can stir up volatility in bond markets and mortgage rates, but surprisingly, that wasn't the case this time around.

In fact, the dot plot actually leaned toward slightly lower rates on the day the Fed made their announcement. However, Fed Chair Powell's press conference balanced things out, keeping rates steady. The result? What could have been a bumpy week for mortgage rates ended up being quite calm. While there was a slight uptick in rates mid-week, a small recovery on Friday leveled things out, making the week-over-week change almost non-existent. That level of stability, especially given the potential for volatility, was impressive.

In simpler terms, the market had already factored in the Fed's more optimistic outlook going into the week, so it would take significant changes in economic data to cause any major movement. Looking ahead, early October will bring key economic reports that could influence rates, though next week's reports, while important, won’t arrive until Thursday and Friday.