First off, a big shout out to my Dad who turns 75 today!  Though he turns 75 today, he’s been a diamond for years.

On to more boring stuff, but the reason you are reading this in the first place: You know that the Fed meets next week.  As of this morning, there’s a 55% chance for a 1/4% cut and a 45% chance for a 1/2% cut. If you add up the probabilities, you’ll discover there’s a 100% certainty of a Fed rate cut next week.  Mortgages are always early to a party because they have to foot the bill for the next 30 years and want to ensure that they’re ahead of the curve. As a result, mortgage rates started coming down earlier this week, and the demand has already been encouraging for those of us with an interest (pun intended) in housing and other big ticket items which acquisitions are most often acquired by means of financing.

Finally, the “higher for longer” mantra is now coming to an end.  The Fed typically keeps rates at the cycle peak for 8.5 months and we’ve been at this current level for 14 months (hence “higher for longer” has indeed played out).  Only back prior to the Great Recession did the FOMC hold rates higher for even longer, and that era experienced a 14.5 month plateau. So while I am grateful that rates are moving in the right direction for me professionally and for the American consumer, I am also looking ahead at what this next economic cycle is going to look like. The mere comparison to the recession brought on by the housing crisis 15 years ago, if it doesn’t make you shudder, is at least reason enough to give pause to whatever else it is you were thinking about and consider carefully how you might need to prepare economically.

Recessions are a generalized slowing of the economy, which impacts the majority of people and businesses alike.  But there is generally one economic factor that tips the scales and ushers in the period of contraction. And that factor takes the fall for everything that follows. It  may be oil, housing, labor, a disease, a war, etc.  Don’t know what this next one will be attributed to yet, so stay tuned for that fun piece of info that we’ll be hearing about every day for the next few years.  The fact that the Fed is cutting rates right before the election is another sign that the time to pivot is now and that they believe the timing of the rate cut is critical.