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Fed to lower rates only twice this year
Posted on 1/27/26 at 8:01 am
Posted on 1/27/26 at 8:01 am
quote:CNBC
Despite the expected arrival of a new Trump-appointed Federal Reserve chair in coming months, respondents to the CNBC survey are only forecasting modest changes to the funds rate over the next two years.
The results, which mirror pricing in Fed Funds futures market, show that neither Wall Street nor economic forecasters believe that the next Fed chair will drive down overnight rates towards the low levels demanded by the president.
The survey shows the average outlook is for two more quarter-point cuts this year, or 50 basis points, with no cuts expected yet for 2027. The Funds rate is seen settling around 3% this year and staying there through 2027. President Trump, who is currently considering who to name to replace Fed Chair Jerome Powell, has said U.S. rates should be among the lowest in the world and asked for the Fed to reduce interest rates to 1%.
Given a 2% inflation rate, the president is essentially asking for negative real rates.
4
Posted on 1/27/26 at 8:25 am to bigjoe1
quote:
asked for the Fed to reduce interest rates to 1%.
This is insanity.
Posted on 1/27/26 at 10:26 am to bigjoe1
Nobody can make predictions with any confidence at this time.
Hard to predict how much the new chair will succumb to political pressure.
Will tariffs stabilize?
How will deportations affect employment numbers?
Hard to predict how much the new chair will succumb to political pressure.
Will tariffs stabilize?
How will deportations affect employment numbers?
Posted on 1/27/26 at 10:30 am to KWL85
Plus, will Powell resign as a Fed. Governor. That term expires 1/28.
Tradition says Fed Chairman do that. I've read the last time that happened was in the Truman administration.
Really hope he does resign. Staying on will sure give the impression that's it's political.
Tradition says Fed Chairman do that. I've read the last time that happened was in the Truman administration.
Really hope he does resign. Staying on will sure give the impression that's it's political.
Posted on 1/27/26 at 11:19 am to bigjoe1
quote:If I were him, I would probably stick around and be petty.
Plus, will Powell resign as a Fed. Governor. That term expires 1/28.
Posted on 1/27/26 at 11:41 am to bigjoe1
It’s amazing to me that people that yell about housing being too expensive also want rates cut.
It would be interesting to see an honest scenario of what would happen if the Fed Volckered the rates for two years to flush out the financiers and PE from housing and other private industries they all accumulated with cheap credit.
Just give me 30 days notice to go to all cash because it would be a shitshow.
It would be interesting to see an honest scenario of what would happen if the Fed Volckered the rates for two years to flush out the financiers and PE from housing and other private industries they all accumulated with cheap credit.
Just give me 30 days notice to go to all cash because it would be a shitshow.
This post was edited on 1/27/26 at 12:00 pm
Posted on 1/27/26 at 1:07 pm to bigjoe1
quote:
Given a 2% inflation rate
We’re basically at a 3% inflation rate now. This, plus coming down from cumulative 20% inflation is why people have affordability issues.
I have no idea why people want rate cuts. Unemployment is based on a ton of other factors (AI, job participation, tariffs, deportations, etc.) and decreased rates aren’t going to fix that. Set the rate to fix inflation and the rest will eventually settle out.
Posted on 1/28/26 at 7:26 am to SquatchDawg
quote:
It’s amazing to me that people that yell about housing being too expensive also want rates cut.
25 years of real estate investing has shown me that when rates go down, housing prices go up. I am small potatoes compared to big builders and big investors. They set the prices and wait it out to see if they stick. The elite realtors are in the mix on setting prices, as the big builders create relationships with the top realtor to represent the selling side.
Most buyers focus on the house payment. They don't care which part of it is principal vs interest. A good realtor provides them the monthly payment, including insurance and taxes and let the buyer give a go/no-go. With the realtor suggesting this is a good deal. And most buyers are willing to pay more than they should. We are not a patient country when it comes to buying things.
Posted on 1/28/26 at 10:42 am to KWL85
quote:
We are not a patient country when it comes to buying things
Once supply catches up then maybe it will drop a bit. I feel like prices are here to stay though
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