{"id":13535,"date":"2024-11-14T20:19:16","date_gmt":"2024-11-14T20:19:16","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13535"},"modified":"2024-11-14T20:19:17","modified_gmt":"2024-11-14T20:19:17","slug":"fed-cuts-rates-again-whats-ahead-for-next-year","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/fed-cuts-rates-again-whats-ahead-for-next-year\/","title":{"rendered":"Fed Cuts Rates Again\u2014What&#8217;s Ahead For Next Year?"},"content":{"rendered":"\n<p><em>Will H. from Little Rock, AR asks: <\/em>Hello Mitch, that was quite a week! Lost in all the election coverage was the Fed cutting rates again. I have two questions for you this morning: do you think more rate cuts are coming next year even with the new economic policy, and will mortgage rates follow? My wife and I bought a house about a year and a half ago, and I\u2019d love the opportunity to refinance. Thanks for your time.<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for sending in your questions, Will. I\u2019ll answer each one in turn.<\/p>\n\n\n\n<p>First, the rate cut. The Federal Reserve actually pushed back their November meeting to Wednesday-Thursday, so it would not fall on election day. That\u2019s when we learned of the decision to cut the benchmark fed funds rate by another 25 basis points, to a range of 4.5% to 4.75%. This move was widely expected, which is probably another reason it didn\u2019t make big news.<sup>1<\/sup><\/p>\n\n\n\n<p>Regarding future rate cuts, if we just look at the projections released after the Fed\u2019s September meeting, we might reasonably expect another 100 to 125 basis points of cuts at future meetings, which could mean another 25-basis-point cut in December. I think the December rate cut will proceed as planned. But looking ahead to next year, I think Fed policy and the path of interest rates are more uncertain.<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\">Top Tips and Mistakes to Avoid in Volatile Markets<\/a><\/u><\/strong><\/p>\n\n\n\n<p>It is too early post-election to forecast how political changes will impact inflation, the jobs market, interest rates and economic growth, and this has many investors wondering if more volatility is ahead.<\/p>\n\n\n\n<p>While market turbulence can\u2019t be avoided entirely, proven strategies can help minimize its impact. That\u2019s why we\u2019ve created <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\">The Do\u2019s and Don\u2019ts of Stock Market Volatility<sup>2<\/sup><\/a><\/u><\/em><\/strong><em>,<\/em> a guide offering 30 years of expert-backed recommendations for investors. Inside, you\u2019ll also find:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Three best practices to successfully manage periods of market volatility<\/li>\n\n\n\n<li>Three most common mistakes investors make, and why they are so damaging to your long-term investing goals<\/li>\n\n\n\n<li>Historical data that supports our conclusions and underscores the recommendations we propose<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\"><span style=\"text-decoration: underline;\">Download Your Copy Today:\u00a0<em>The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/em>\u00a0<sup>2<\/sup><\/span><\/a><\/strong><\/p>\n\n\n\n<p>Trump\u2019s victory with a \u201cred sweep\u201d of the Senate and the House will almost certainly change the direction of economic policy in a meaningful way. This could mean significant changes to tax policy, tariffs, and the regulatory environment. It is way too early to forecast how these potential changes will impact inflation, the jobs market, and economic growth. But the fact that change is likely in the offing could make the future path of interest rates not so straightforward. If across-the-board tariffs and tax cuts spur accelerating inflation and economic growth at once, for instance, it is not likely the Fed would want to be easing policy in that scenario.<\/p>\n\n\n\n<p>As for mortgage rates, it\u2019s important to remember that the Federal Reserve is not exerting influence over the long end of the interest rate curve when they set the benchmark fed funds rate. Mortgage rates are more influenced by Treasury yields, which are influenced by future expectations for growth and inflation. If the outlook from here is for strong economic growth and more inflationary pressure because of growth, tariffs, and\/or some other factor, then I think the outlook for long duration Treasury bonds\u2014and buy extension mortgage rates\u2014will remain elevated. There\u2019s not really a scenario where economic growth accelerates <em>and <\/em>Treasury bond yields come down meaningfully. In my opinion, you\u2019ll likely need to wait until an economic recession before mortgage rates come down to levels that are attractive for a refinance.<\/p>\n\n\n\n<p>During the waiting process, preparing for market uncertainty is essential. And to prepare you for any outcome, I\u2019m offering our guide,\u00a0<em>\u2018<\/em><strong><em><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=mitchsmailbox_dos_and_donts_zim_11_14_2024&amp;content=dos_and_donts\"><span style=\"text-decoration: underline;\">The Do\u2019s and Don\u2019ts of Stock Market Volatility<u><sup>3.<\/sup><\/u><\/span><\/a><\/em><\/strong>, which provides recommendations, based on 30 years of expertise, and explores:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Three best practices to successfully manage periods of market volatility<\/li>\n\n\n\n<li>Three most common mistakes investors make, and why they are so damaging to your long-term investing goals<\/li>\n\n\n\n<li>Historical data that supports our conclusions and underscores the recommendations we propose<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Fed&#8217;s latest rate cut prompts a reader to ask whether more cuts are coming, and what the cuts mean for mortgage rates. <\/p>\n","protected":false},"author":3,"featured_media":13536,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13535","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13535"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13535\/revisions"}],"predecessor-version":[{"id":13537,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13535\/revisions\/13537"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13536"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}