As we first outlined earlier this year, the expected value of the Fed’s rate cuts in 2024 was on the decline, with our analysis suggesting fewer than half the number of cuts that some were banking on to drop the cost of capital and mortgage rates at the end of last year.
With our analysis projecting fewer than three quarter-point rate cuts this year, as of two weeks ago, the average rate for a benchmark 30-year mortgage has since jumped 28 basis points to 7.10 percent.
And in fact, based on our most recent analysis of the futures market, the expected value of the Fed’s rate cuts over the next eight months has dropped another 20 basis points, with the probability of at least two rate cuts in 2024 having dropped from 80 to 50 percent; the probability of a single rate cut having ticked over 30 percent; and the probability of no rate cuts (for you) having jumped from zero (0) to 15 percent.
We’ll keep you posted and plugged-in.
Privileged classes cry out in protest, how can they maintain their consumption of luxury goods if monetary policy doesn’t facilitate speculation in human necessities (chiefly, shelter) and the distribution to them of all gains to productivity?! If the wealthy can’t borrow for free in order to drive up the price of human necessities and squeeze workers of all “excess” income, how can civilization possibly survive?!