The Fed’s rate cuts could have unintended consequences for the housing market
CNN
Over the past couple of years, the US economy has wrung out inflation like dirty mop water from just about every sector — except for the housing market, which remains paralyzed by high prices and chronically low supply.
Over the past couple of years, the US economy has wrung out inflation like dirty mop water from just about every sector — except for the housing market, which remains paralyzed by high prices and chronically low supply. But the action that could help solve America’s home affordability crisis could potentially make it worse. To understand why, let’s take a look at how we got here. At the core of the housing puzzle is a supply and demand imbalance. It’s Econ 101: There are more people ready to buy than there are houses for sale. That was true even before the pandemic came along and sent demand through the roof. The market had become all but impenetrable after mortgage rates went from historic lows in 2020 to their highest levels in a generation last year. When the Federal Reserve (almost certainly) starts to cut rates Wednesday, it should, in theory, shake the market loose. But a lot depends on how aggressively the central bank moves to bring borrowing costs down across the board. A half-point rate cut — which seems unlikely, but is not out of the question — would send a signal to the market that the Fed is serious about reversing the “lock-in” effect that makes homeowners with low-rate mortgages reluctant to sell in a high interest-rate environment.
Nippon Steel is expected to re-file its application for a national security review by American regulators of its $15 billion takeover bid of US Steel, sources familiar with the matter told CNN on Tuesday, buying Japan’s largest steelmaker an additional 90 days to close its acquisition of an American rival after political opposition emerged in an election year.
So far, the attacks that targeted Iran-backed Lebanese militant group Hezbollah members through their pagers have had devastating consequences. At least nine people, including an eight-year-old girl, were killed, and at least 2,800 were wounded. Over 150 of those injured are in critical condition, according to the Lebanese health minister.