The 25-basis-point Fed rate cut in early November 2024 will help the construction and housing markets, although more cuts will help. Home mortgage rates will lower somewhat, but some buyers still want to wait for more favorable rates unless they have found the house they want and feel that the risk of losing it outweighs a slightly lower mortgage rate.
The Fed sees that the American economy is almost at the 2% inflation target, but going overboard on rate cuts might reignite inflation, something they do not want to do. Also, bond investors who are happy with high-interest returns from bonds and the money markets will prefer to move their money to risk on assets like stocks, crypto or other riskier ventures if the bond returns fall back to the just-above-zero returns of previous years.
