On August 23, 2024, Dennis Jansen discussed the Federal Reserve’s latest speech on KBTX’s First News at Four.
Federal Reserve Chairman Jerome Powell spoke of future rate reductions in the Federal Funds Rate. Jansen said, “I don’t think it’s a surprise to anyone that listened to it that I think he just told us interest rates are falling when the [Federal Open Market Committee] meets in September.” Rates could drop 0.25% to 0.75% overall, he said.
Jansen emphasized that although the Federal Funds Rate is not the same as mortgage rates, mortgage rates usually fall after a Federal Funds Rate reduction. “I do think as the Fed lowers the policy rate - the federal funds rate - you would tend to see some decline in interest rates. Again, I just want to emphasize it’s not one-for-one. Mortgage rates have declined over 1% from a year ago, so they are on a downward trend anyway before the Fed made any announcement today, and so has been the 10-year bond rate,” Jansen added.