Markets are currently pricing in a near-certain rate cut at the Fed’s next meeting, but hopes for additional cuts later this year have been put on hold, at least for now.
“Slowing job growth, persistent inflation, and now a data blackout complicate the Federal Reserve’s next move,” said Sam Williamson, senior economist at First American.
“The delay of September’s jobs report, which was scheduled for release this morning, leaves the Fed without its most important labor market signal as it prepares for its late-October meeting. If the shutdown continues, inflation data and other releases could also be postponed, further narrowing the Fed’s view of the broader economy.”
This uncertainty casts a shadow over brokers. While the Senate standoff is unlikely to have a significant short-term impact on mortgage rates, potential loan delays, backlogs and reduce consumer confidence amid uncertain economic conditions all stand to hurt clients.
For one broker, who requested anonymity, the political finger-pointing by the Department of Housing and Urban Development (HUD) is an “embarrassing” reflection of the current state of affairs.