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Are rate cuts on the Horizon?

If they are then now is a great time to apply so you are ready to lock on your approved application, if they're not its a good indication that the economy is still doing very well and you should probably lock in a rate while they are still low and get ahead of any adverse market announcements that could send rates higher. Applications are up for June and July so if you've been thinking about renewing your loan now is a good time no matter which way the fed goes, below is what they have had to say....

Economists had been nearly certain the Federal Reserve would cut interest rates in coming weeks. But now, after the solid June jobs reports, a few are having doubts.

Most prominent in this camp is Andrew Hollenhorst, head of the economics team at Citigroup. He thinks the Fed will refrain from cutting rates after their meeting on July 30-31.

In an interview, Hollenhorst said that while Fed Chairman Jerome Powell and his No. 2 Richard Clarida have made it clear that near-term cuts are on the table given “cross currents” hitting the economy in the form of trade fights and weak global growth, other officials, including Dallas Fed President Rob Kaplan, have taken a more “wait-and-see” stance on whether these forces dampen the domestic economy.

The bounce back for the labor market may lead the majority on the Fed to agree the incoming data since the June meeting has not met a “threshold to act,” Hollenhorst said.

If the Fed holds interest rates steady, it will mostly likely maintain an easing bias, meaning the committee more likely to cut rates, if necessary, at upcoming Fed meetings.

This forecast is “a close call,” Hollenhorst admitted.

The market still sees a roughly 100% chance of a quarter-point rate cut at the end of the month. The jobs report has removed expectations of a half-point move then.

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