Meanwhile, even if the Fed holds in December, other factors like a continuing shutdown or further weakness in the job market may push rates lower anyway.
“I would say that if the news continues to show that the employment sector remains weak, and that if we see that tariff pressures are eased, like what’s going on with China, I think the mortgage rates will settle back down,” Melissa Cohn, regional vice president of William Raveis Mortgage, told Mortgage Professional America.
“The markets always tend to be very reactionary. And I think without any concrete data to support a move one way or the other, that the moves can be exaggerated.”
Broader economic transition
Bessent framed the current environment as a “transition period,” attributing high inflation to pandemic-era government spending, which he said the Trump administration is now reining in.
“If we are contracting spending, then I would think inflation would be dropping. If inflation is dropping, then the Fed should be cutting rates,” Bessent said.
