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The expectation is that the Fed will cut rates — but what if inflation spiked in August?
The most recent jobs report showed mediocre job creation in July.
Foreign investors would also pull their money out of the U.S.
If investors lose faith in the Fed, they may start demanding higher yields on long-term bonds. That could lead to an increase in the interest rate for mortgages, government debt and more.
“A lot of that information on what the Fed is going to do in September is already priced in” to current mortgage rates, said Zillow economist Kara Ng.
Inflation is taking a back seat as Fed Chair Jerome Powell signaled that a rate cut is coming.
The first time central bank officials set 2% as their inflation target was in 2012.
July’s weak jobs report could be grounds for a big rate cut come September.
Higher mortgage rates have prevented many first-time homebuyers from purchasing a home.
Wages are also rising but people aren't spending as much.
