Hey there, folks. I hope you’re doing well in these times of change and uncertainty. This week’s market update is coming with a heavy heart. We can’t avoid talking about the recent terrorist attacks in the Middle East and how they’re shaking up our financial world. These events have a profound impact, and it’s crucial to understand what’s happening and how it might affect us.
First Things First – Support for Our Heroes
Before we dive into the market rollercoaster, I want to take a moment to acknowledge those who are directly affected by these events. If you have a loved one called into duty or deployed, my heart goes out to you. I know several friends whose family members are on assignments that have been abruptly called to duty. I pray for their safe return and a swift resolution to these challenging times. No one should ever have to endure what’s happening, but sadly, it’s the world we live in today.
Markets in the Face of Uncertainty
When uncertainty rocks the world, we often see a phenomenon known as the “flight to safety.” During times like these, stocks are typically sold off, and money flows into bonds, a safe haven for investors. As bonds are purchased, they drive interest rates down.
In the early part of this week, we witnessed a drop in interest rates. It was quite unique because the markets were closed on Monday due to the holiday. However, on Tuesday, we saw substantial interest rate drops, primarily due to futures trading. This trend continued through Wednesday and Thursday morning.
Shifting Tides and Market Impact
Then came Thursday, when the Consumer Price Index (CPI) was released, and it showed hotter-than-expected numbers. This gave more momentum to the Federal Reserve’s decision to keep rates at the current level for a longer duration. Consequently, mortgage rates shot up. But today, we received some positive news regarding the trade deficit and import prices, leading to a market rally.
Overall, rates have slightly improved this week, and it seems we are nearing a market peak. However, this situation remains data-dependent, especially after the release of the CPI.
The Fed’s Dilemma
As for the Fed, the chances of a rate hike in November stand at about 9%, while the December meeting has roughly a 30% chance of a hike. The Fed seems to be edging closer to the end of their rate-raising journey, although the full impact of their previous hikes is yet to be felt.
Silver Lining in Real Estate
In the midst of these financial fluctuations, it’s still a great time to buy a house and become a homeowner. There’s less competition in the market than we’ve seen in the past four years. Yes, interest rates are a bit higher, but the potential to refinance in the future might make it worth your while.
Let’s Connect
As always, I’m here for all your mortgage needs, and if you ever need recommendations for roofers, plumbers, or electricians, I’ve got a list that might come in handy.
To all those with family members called into duty or facing challenging times, I wish for their safe return and a peaceful resolution to these trying circumstances. We’re in this together, and I’m here for you.
I’m Sean Zalmanoff, and if you need anything or just want to chat, don’t hesitate to reach out. Peace out, and let’s navigate these times together.
Poted 10/13/2023
