On September 18, the Federal Reserve kicked off the cutting cycle by reducing overnight rates by 50 basis points. Since then, mortgage rates have gone higher. This is not obviously an intuitive thing to happen. The point of a rate cut is to stimulate the economy by reducing the cost to borrow. And people generally know that interest rates and mortgage costs are linked. Well, it turns out they are linked, but not directly. And certainly not in some linear manner. On this episode of the podcast, we speak with Tom Graff, the CIO of the wealth management firm Facet, and a long-time trader in the fixed income space. We talk about the factors that influence mortgage rates, why the spread between a 30-year fixed and a 10-year Treasury fluctuates over time, and how rate cuts can be priced in before they even happen. We also talk about what we'll need to see for mortgage rates to move sustainably lower.

Read More:
US Mortgage Rates Climb to 6.52%, Highest Since Early August
Why a 'Broken' Mortgage Market Is Keeping Borrowing Rates Extra High

On September 18, the Federal Reserve kicked off the cutting cycle by reducing overnight rates by 50 basis points. Since then, mortgage rates have gone higher. This is not obviously an intuitive thing to happen. The point of a rate cut is to stimulate the economy by reducing the cost to borrow. And people generally know that interest rates and mortgage costs are linked. Well, it turns out they are linked, but not directly. And certainly not in some linear manner. On this episode of the podcast, we speak with Tom Graff, the CIO of the wealth management firm Facet, and a long-time trader in the fixed income space. We talk about the factors that influence mortgage rates, why the spread between a 30-year fixed and a 10-year Treasury fluctuates over time, and how rate cuts can be priced in before they even happen. We also talk about what we'll need to see for mortgage rates to move sustainably lower.
Read More: <a href="https://www.bloomberg.com/news/articles/2024-10-16/us-mortgage-rates-climb-to-6-52-highest-since-early-august?sref=frV97TwV?utm_medium=referral&amp;utm_source=podcast&amp;utm_campaign=odd_lots&amp;utm_content=article">US Mortgage Rates Climb to 6.52%, Highest Since Early August</a> <a href="https://www.bloomberg.com/news/articles/2022-10-27/why-a-broken-mortgage-market-is-keeping-borrowing-rates-extra-high?sref=frV97TwV?utm_medium=referral&amp;utm_source=podcast&amp;utm_campaign=odd_lots&amp;utm_content=article">Why a 'Broken' Mortgage Market Is Keeping Borrowing Rates Extra High</a>

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Tuesday and Thursday for interviews with the most interesting minds in finance, economics and markets.

Odd Lots

On Bloomberg’s Odd Lots podcast Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday. 

On Bloomberg’s Odd Lots podcast Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday.

Why Mortgage Rates Went Up After the Fed's Big Cut

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/d536b62f-35dd-47be-b286-b20d013e0085/transcript

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