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When the Fed cuts interest rates, people expect mortgage rates to also go down. But in 2024, the opposite happened.
In the U.S., it’s partly due to expectations of a stronger, more inflationary future economy with bigger budget deficits.
The pandemic set the stage for the bankruptcies, although they were delayed by government payouts and PPP loans.
They’re starting 2025 at the highest they’ve been since last summer.
The prospect of tariffs and of interest rates staying higher for longer will likely continue to push up the U.S. currency’s value in 2025.
The December rate cut was expected. But the Fed also reduced the number of expected rate cuts for 2025.
Construction is dependent on moderate interest rates. Restaurants are affected when consumer borrowing costs rise.
“We’re closer to the neutral rate, which is another reason to be cautious about further moves,” said Fed Chair Jerome Powell.
Tax cuts, tariffs and mass deportations could put upward pressure on prices — and interest rates.
High interest rates have held back investment in production. They’ve eased, but firms are wary of the effects of potential tariffs and tax cuts.
