Federal Reserve Rate Cut: Is a 0.50% Reduction Coming Soon? Market Trends Explained

Every home buyer or seller is probably wondering what the Federal Reserve will do for the rest of the year and into next year.

Buyers are asking themselves, 'Should I buy now or wait for rates to drop further?'

Sellers are considering, 'Should I sell now or wait, so I don’t leave money on the table?'

One of the best tools to help with this decision-making is the CME FedWatch Tool.

Here’s what the CME FedWatch Tool does:

• Predicts Rate Hikes or Cuts: It offers probabilities for whether the Fed will raise, cut, or maintain the current interest rate during its next meeting.

• Market Sentiment: It shows how the market is pricing in the likelihood of rate changes, providing insights into expectations.

• Updated in Real-Time: As market conditions shift, the tool updates its probability estimates in real-time.

The current rate(benchmark rate) is 4.75%–5.00%.

The chances the feds lowering the rate by a quarter percentage point is 50%.

And them doing a half percentage is 49%.

This indicates that market sentiment is leaning toward the Federal Reserve reducing rates by another 50 basis points, making this scenario increasingly likely.

We could be looking at another 0.50% rate cut.