With the Fed having formally signaled a more “patient” approach with respect to any future rate hikes back in January, the probability of an easing started to emerge, as we first noted at the time.

And as predicted, the Federal Reserve has just cut the benchmark Federal Funds rate by 25 basis points (0.25 percentage points) and hinted at the possibility of adopting another cut by the end of the year.

Having dropped its benchmark rate a total of five (5) percentage points between August of 2007 and the end of 2008, a move which helped drive the 30-year mortgage rate down to an all-time low of 3.31 percent in 2012, the Fed started raising rates at the end of 2015 but had only managed to add back a total of 2.25 percentage points prior to today’s easing.

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