Skip to main content. Skip to contact links. Skip to navigation. If you wish for the loan officer to reach out to you, click to skip to their contact form. If you have questions for this loan officer, click to call them. If you need loan servicing, click to call our loan servicing department at 855-979-1084 Skip to footer navigation.
Amanda Keith

Amanda Keith

Loan Officer
Movement Mortgage
NMLS ID # 1419677

A Healthy Economy May Delay Rate Cuts

By: Movement Staff
January 26, 2024
It has been a quiet week for economic data releases, with investor attention remaining fixed on the timetable for future rate cuts. Over the past few weeks, we've highlighted the 'tug-of-war' between markets and the Fed regarding early rate cuts. Since Fed Chairman Jerome Powell's dovish commentary in December, markets had been pricing in a March rate cut above 50%, this has changed. Market sentiment, initially favoring a March rate cut (now below 50%), now leans towards a possible cut in June.

This change in narrative is primarily data-driven. As we discussed last week, economic reports have been consistently painting a picture of a healthy economy, allowing the Fed room to maintain a “higher for longer” policy to get inflation back down to target. On Friday, the release of the PCE Deflator came in softer than expected at 2.9%, marking the first time PCE has held a 2% handle since 2021. The phrase 'soft landing' has made its way back into analyst’s vocabulary this week, suggesting that the economy is achieving a balanced state.

It's difficult to argue against this perspective when considering solid consumer spending and a robust labor market, coupled with easing inflation as hinted by the PCE. With a plethora of economic data set to be released next week, it will be interesting to see which direction the narrative takes from here.

Author: Movement Staff

The Market Update is a weekly commentary compiled by a group of Movement Mortgage capital markets analysts with decades of combined expertise in the financial field. Movement's staff helps take complicated economic topics and turn them into a useful, easy to understand analysis to help you make the best decisions for your financial future.

RELATED

Amanda Keith
Amanda Keith
Loan Officer
Wondering how much home you can afford? Let’s talk about your next move!
2320 W. 8th St, Erie, PA 16505
(opens in a new tab)
NMLS # 1419677

State License #WA-MLO-1419677, PA-105453