What To Look For From This Week’s Fed Meeting?
"The successful warrior is the average man, with laser-like focus." - Bruce Lee
Hey Everyone,
Welcome back to The Ridgeline Rundown!
I hope you had a fantastic week. My wife and I are currently in beautiful Mexico, soaking up the sights and flavors. I even decided to take a leap—literally—and try bungee jumping! It’s been a fun reminder of the excitement in stepping outside your comfort zone. Can’t wait to bring that energy back with me!
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Enjoy this week's updates, and reach out anytime with any real estate questions!
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Mortgage Minute
Yesterday’s drop in rates might seem tied to the Fed’s 0.25% cut, but most of the improvement came well before that, likely driven by election-related market swings. With volatility high, rates dipped below 7.0% for the first time since October 25th—a promising sign for active buyers.
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What To Look For From This Week’s Fed Meeting
You may be hearing a lot of talk about the Federal Reserve (the Fed) and how their actions will impact the housing market right now. Here’s why.
The Fed meets again this week to decide the next step with the Federal Funds Rate. That’s how much it costs banks to borrow from each other. Now, that’s not the same thing as setting mortgage rates, but mortgage rates can be influenced through this process. And if you’re thinking about buying or selling a home, you may be wondering about the downstream impact and when mortgage rates will come down.
Here’s a quick rundown of what you need to know to help you anticipate what’ll happen next. The Fed’s decisions are guided by these three key economic indicators:
The Direction of Inflation
How Many Jobs the Economy Is Adding
The Unemployment Rate
Let’s take a look at each one.
1. The Direction of Inflation
You’ve likely noticed prices for everyday goods and services seem to be higher each time you make a purchase at the store. That’s because of inflation – and the Fed wants to see that number come back down so it’s closer to their 2% target.
Right now, it’s still higher than that. But despite a little volatility, inflation has generally been moving in the right direction. It gradually came down over the past two years, and is holding fairly steady right now (see graph below):
The path of inflation – though still not at their target rate – is a big part of the reason why the Fed will likely lower the Fed Funds Rate again this week to make borrowing less expensive, while still ensuring the economy continues to grow.
2. How Many Jobs the Economy Is Adding
The Fed is also keeping an eye on how many new jobs are added to the economy each month. They want job growth to slow down a bit before they cut the Federal Funds Rate further. When fewer jobs are created, it shows the economy is still doing well, but gradually cooling off—exactly what they’re aiming for. And that’s what’s happening right now. Reuters says:
“Any doubts the Federal Reserve will go ahead with an interest-rate cut . . . fell away on Friday after a government report showed U.S. employers added fewer workers in October than in any month since December 2020.”
Employers are still hiring, but just not as many positions right now. This shows the job market is starting to slow down after running hot for a while, which is what the Fed wants to see.
3. The Unemployment Rate
The unemployment rate shows the percentage of people who want jobs but can’t find them. A low unemployment rate means most people are working, which is great. However, it can push inflation higher because more people working means more spending—and that makes prices go up.
Many economists consider any unemployment rate below 5% to be as close to full employment as is realistically possible. In the most recent report, unemployment is sitting at 4.1% (see graph below):
Unemployment this low shows the labor market is still strong even as fewer jobs were added to the economy. That’s the balance the Fed is looking for.
What Does This Mean Going Forward?
Overall, the economy is headed in the direction the Fed wants to see – and that’s why experts say they will likely cut the Federal Funds Rate by a quarter of a percentage point this week, according to the CME FedWatch Tool.
If that expectation ends up being correct, that could pave the way for mortgage rates to come down too. But that doesn’t mean they’ll fall immediately. It will take some time. Remember, the Fed doesn’t determine mortgage rates. Forecasts show mortgage rates will ease more gradually over the course of the next year as long as these economic indicators continue to move in the right direction and the Fed can continue their Federal Funds rate cuts through 2025.
But a change in any one of the factors mentioned here could cause a shift in the market and in the Fed’s actions in the days and months ahead. So, brace for some volatility, and for mortgage rates to respond along the way. As Ralph McLaughlin, Senior Economist at Realtor.com, notes:
“The trajectory of rates over the coming months will be largely dependent on three key factors: (1) the performance of the labor market, (2) the outcome of the presidential election, and (3) any possible reemergence of inflationary pressure. While volatility has been the theme of mortgage rates over the past several months, we expect stability to reemerge towards the end of November and into early December.”
Bottom Line
While the Fed’s actions play a part, economic data and market conditions are what really drive mortgage rates. As we move through the rest of 2024 and 2025, expect rates to stabilize or decline gradually, offering more certainty in what has been a volatile market.
Featured Listing
 Downtown authority likely to pass for Old Colorado City, but may lack mill levyOld Colorado City voters have chosen to create a Downtown Development Authority that would mirror the one covering downtown Colorado Springs but are mixed on its funding. The early unofficial results of the election, which was run though the Spencer Fane law firm, was 102 votes in favor of creating the district and 71 against as of 8:45 p.m. Tuesday. |  Colorado Springs Airport announces the city’s first international flight optionSouthwest Airlines will provide nonstop seasonal service to Cancun beginning June 7, 2025. “This is a huge win for our community and marks the beginning of a new chapter for COS with international service for the first time in our history,” said Greg Phillips, the airport’s director of aviation. The weekly flights are scheduled to run through the summer. |  Walking Tour: Art on the StreetsThe annual Art on the Streets program transforms Downtown streets into an outdoor gallery. Explore the currently installed artworks and get firsthand insight into the artists who created them. Date: November 9 Time: 10:00 am - 11:00 am Venue: 120 E Bijou St Colorado Springs, CO 80903 United States |
Military News and Updates
Military modern: New luxury hotel and events center pays homage to the Air Force Academy
Walking through the new Hotel Polaris, it’s not hard to recognize the ties that the new luxury hotel on North Gate Boulevard has to its neighbor, the United States Air Force Academy.
“Because of where we’re situated, because we’re attached with the footbridge over to the visitor center, we wanted to create a real connection to the academy and take guests on a journey through this area,” said Kevin Barroso, director of sales and marketing for Hotel Polaris.
However, the connection isn’t just geographical — it’s woven into the design and decor of the hotel itself. You’re welcomed in through four color-coded entries to the hotel — blue, silver, gold and red — which are inspired by the four rotating class colors for academy cadets. The main floor tile is modeled on the academy’s terrazzo. There are also other, not-so-subtle style inspirations from the academy, including hallway wallpaper featuring the iconic spires of the cadet chapel and black and white photos of moments in the academy’s history. Additionally, the lighting across the public spaces is intentionally placed to emphasize the views of the mountains and the academy from the full glass windows facing the west during the day.
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