This will be a momentous week for the real estate mortgage industry as the presidential election wraps up and the Federal Open Market Committee meets to decide on another interest rate cut.
Nov. 5: Tuesday is election day and we should finally learn who is the next president…at least we hope. Many experts have forecasted that this election could be one of the closest in U.S. history and that it could possibly take days, if not weeks, to decide who won the presidential election. According to the polling site fivethirtyeight, polls in the seven battleground states where most observers believe the election will be decided show the candidates being statistically tied or within 2% of each other, which is well within the margin of error.
It is estimated that a total of $10.5 billion has been spent on this election. That figure includes all campaign spending from the presidential races to local government. And about $1.2 billion alone has been spent in the key battleground state of Pennsylvania.
Nov. 6-7: The Federal Open Market Committee will begin two days of meetings on Wednesday to discuss the state of the economy. The big questions for the Fed are whether or not to cut interest rates, and if so, by how much? According to Reuters, 90% of the 111 economists the news service polled predict that the Fed will end the meeting on Thursday afternoon with a 2 p.m. announcement of a 25 basis-point rate cut.
The Fed began its easing cycle in September with a surprising 50 basis points reduction in the federal funds rate to a range of 4.75% to 5.00%. While job growth has remained healthy and consumers are still spending, inflation has continued to decline and is nearing the Fed’s stated goal of 2%. More than 90% of the economists Reuters polled expect the Fed to also cut rates in December by 25 basis points, taking the fed funds rate to the 4.25% to 4.50% range.
Nov. 8: Preliminary results for the November consumer sentiment survey from the University of Michigan will be released. The report should give a sense of consumer sentiment as we go into the holiday season. This year’s monthly index showed consumer sentiment peaking in March at 79.4, and then declining through spring and summer to a yearly low of 66.4 in July. The attitude of consumers appeared to be brightening in September as sentiment measures recovered, rising 3% to 70.1. The university’s expectations index was up 13% in September year over year.
