For the third time this year, The Federal Reserve has lowered the target range for the key, short-term federal funds rate by 25 basis points. This cut almost fully reverses the increases we saw in 2018. The FOMC views these enacted reductions as part of a mid-cycle (mid-late-cycle may be more accurate) adjustment to ensure economic growth continues. There were two dissenting votes with this decision, with eight in support.
In a recent article from EyeOnHousing.org reported that “A reading of the changes in the Fed statement (removal of the phrase act as appropriate “to sustain the expansion”) suggests that interest rate cuts are now on pause for the remainder of 2019. Nonetheless, the more dovish 2019 stance of the Fed is good for housing and home building, as forecasts for slow growth continue to be a headwind for additional construction expansion, particularly after the housing affordability crunch of 2018.”