Why Mortgage Rates Went Up After the Fed's Big Cut
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Instagram teen accounts. Automatic protections for who can contact teens and the content they can see. Learn more at instagram.com/teenaccounts. Hey, Odd Lots listeners. Joe and I have something very exciting to share with you. We are going to be hosting a live recording of the podcast on the Lower East Side of New York at Caveat. We're doing it on November 4th. That is, of course, the night before the big US election, so join us for an evening of policy discussion, trade, all that good stuff. We're gonna be hosting Brad Setzer from the Council on Foreign Relations, and we'll also have some su
And I'm Joe Weisenthal.
Joe, have you noticed mortgage rates recently? Yeah.
They've been up. In fact, we're recording this October 16th. Mortgage rates have been rising. And in the last couple weeks, mortgage applications, according to new data out today, have been down. Refi applications have been down. And, of course, it's all ironic because we got that rate cut.
Yeah. That's right. So benchmark rates have been cut by 50 basis points. So we've moved to, like, 5% from the 5.5% on the upper bound. That happened on September 18th. But since then, as you point out, mortgage rates have actually gone up. So I think we've moved from, like, 6.6% on the 30 year to something like 6.9% as we're recording this. We were very close to 7% last week. And just intuitively, that is not what you would expect to see happen when benchmark rates are getting cut.
Alright. I don't want to ever insult fellow colleague or not colleagues, but other people in the media. And, actually, I have no basis for this. But in my mind, there are a bunch of I have no basis for this. But in my mind, there are a bunch of explainers out there on the Internet. It's like, what do Fed rate cuts mean for you? And someone put a bullet in there that said, oh, they mean lower mortgage rates and stuff like that. And obviously, there's a connection between fed rates and what people pay for a 30 year fixed rate mortgage or some other flavor of mortgage, but it's clearly not there'
That's right. And this actually came up in our interview with Chicago Fed president Austin Goolsby Yeah. Talking about what is the impact of rate cuts on the overall economy, and he talked about how everyone has a fixed rate mortgage now, and so that doesn't necessarily feed through. But I guess it does pose some existential questions for monetary policy Yeah. Transmission. Like, if the benchmark rate was a person, it would be that guy, like, pointing at himself in the mirror criticizing his own irrelevance, I guess. That's
interesting. That's interesting. I I wasn't sure where you're going with that, but that's interesting. That's
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