Inflation Eases, Could September Bring a Rate Cut?
July brought some relief in the financial world as inflation held steady, defying expectations of tariff-driven price spikes. Overall prices rose 2.7% from a year earlier, the same pace as June, signaling that the worst of the rapid increases may be behind us.
This steady inflation has boosted the potential likelihood of a Federal Reserve rate cut at the next meeting in September. Markets now expect a high chance of a quarter-point reduction, which could make borrowing a bit easier in the months ahead. Mortgage rates, which recently dipped to a four-month low of 6.63%, may continue to ease as markets anticipate how deep and long the next round of Fed cuts might go.
Even with rates trending down, affordability remains a challenge. While a rate cut can help, other factors like Treasury yields, inflation expectations, and the bond market will continue to shape borrowing costs. Cooler inflation and softer job growth in upcoming reports will be key to further relief.
Looking closer at July’s data, overall prices rose just 0.2% month-to-month, with core inflation, which excludes food and energy, up 0.3%. Used cars, medical care, and shelter were the biggest contributors to rising costs, while tariffs had limited impact on the numbers for now. Housing costs continue to climb, with homeowners seeing a 4.1% increase in expenses and home insurance up nearly 6%. Grocery bills also rose, especially for beef, eggs, and coffee.
For anyone thinking about buying or selling, the combination of steady inflation and potential rate cuts could influence the timing and affordability of your next move. Understanding these trends can help you make smarter decisions in today’s market.
If you’re looking to navigate the current market or explore how rates and inflation trends could impact your buying or selling strategy, reach out to me today! I can provide personalized guidance to help you make the most of your next real estate move.
