Is A Rate Cut Coming Soon?

The Fed is trying to steer the economy's giant ship, but right now they're doing it blindfolded because of the government shutdown. No fresh job stats means they're guessing like kids playing pin the tail on the economic donkey. Still, they're probably gonna trim interest rates a bit very soon, while everyone holds their breath to see what actually happens.

‍

Here are Five Fast Facts on a Fed rate cut coming soon (maybe):

1. ⏳ Coming Soon - The Fed's big meeting is at the end of October, and almost everyone bets they'll lower rates by a quarter point, dropping the key rate to 3.75%–4%. It's like trimming only one slice of the pizza.

2. ⚫ Job Data Blackout - Thanks to the government shutdown, no official job numbers have come out since early September; the last report showed only 22k new jobs in August and unemployment up to 4.3%. That's like flying a plane with instruments only.

3. 👀 Inflation Sneak Peek - One key piece is the consumer price index; some folks were brought back in to get it done in time. Experts guess inflation jumped from 2.9% to 3.1%, which could make the Fed hit the brakes on more cuts by year's end. 

4. ⚖️ Split Opinions - Some members of the Fed want a bigger half-point slash, but Chairman Powell wants minimal change. Fewer than 75% of a survey of economists think another cut happens before 2026.

5. 🏠 Housing Market Wobbles - Fed tweaks don't directly set mortgage rates, but no job info means unpredictability in the housing market. That could scare off homebuyers like a haunted house on Halloween.

🔥Bottom line: In the end, this shutdown has turned the Fed's usually data-packed decisions into a tale of economic Goldilocks - will they cut too much, too little, or just right? Markets are chill for now with that quarter-point trim, but watch out for surprises that could flip the script faster than a viral TikTok dance! It’s a good thing planes can, in fact, be landed with instruments only - there’s hope of them getting it right!

‍

Are you waiting on interest rates to go down?

‍

Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!

‍

BTW, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!

‍