1. Rate Cuts Likely, but Cautious
Powell indicated the Fed is prepared to cut rates, but only if the data supports it. The Fed wants to balance slowing labor market risks without reigniting inflation.
2. September Cut on the Table
Markets now see an 87% chance of a rate cut at the September 17 meeting (up from 75% before Powell spoke). More cuts later in 2025 are possible, but less certain.
3. Housing Market Still Struggling
- High prices and affordability issues aren’t just about interest rates—they’re tied to deeper supply challenges.
- Buyer activity is weak and home sales remain low.
- Foreign buyers with stronger purchasing power are taking advantage of the situation.
4. What’s Next?
- September 17: Likely first 0.25% cut if data lines up.
- Near-term: Mortgage rates could drift to mid-6% or slightly lower, helping affordability.
- Longer-term: More cuts possible—but only if inflation cools and jobs data weakens.
👉 Bottom line: Powell is signaling a slow, careful move toward easing. Markets expect relief starting in September, but housing challenges run deeper than just interest rates.
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