US Fed Interest Rate Predictions Shift Amid Middle East Conflict
US Fed interest rate cut prediction: Will 30-year fixed-rate mortgage rate fall in near term?
The Economic TimesImage: The Economic Times
The ongoing Iran-U.S. conflict has led analysts to revise their predictions for U.S. Federal Reserve interest rate cuts. With inflation rising due to high energy prices and a strong labor market, rate cuts are now expected in 2027 rather than 2026, impacting mortgage rates and housing sales.
- 01Analysts now predict no rate cuts from the US Federal Reserve in 2026 due to rising inflation.
- 02BofA Global Research expects rate cuts to occur in July and September 2027.
- 03The average 30-year fixed-rate mortgage rate is currently at 6.37%.
- 04Sales of previously owned homes increased by 0.2% in April, falling short of expectations.
- 05The median home price rose to $417,700 amid limited inventory.
Advertisement
In-Article Ad
The ongoing conflict between Iran and the U.S. has significantly impacted predictions regarding interest rate cuts by the U.S. Federal Reserve. Initially, analysts anticipated at least two cuts before the end of 2026, but current forecasts now suggest that cuts may not occur until 2027. BofA Global Research has adjusted its expectations to two cuts of 25 basis points each in July and September 2027, while Goldman Sachs has shifted its forecast for cuts to December 2026 and March 2027. The Fed's decision to maintain interest rates in the 3.50% to 3.75% range reflects concerns over inflation, which remains above the Fed's 2% target, exacerbated by rising energy prices due to the conflict. Additionally, the average 30-year fixed-rate mortgage has increased to 6.37%, impacting housing affordability. Sales of previously owned homes saw a modest increase of 0.2% in April, but the median selling price rose to $417,700, indicating a challenging market for buyers amidst limited inventory.
Advertisement
In-Article Ad
Rising mortgage rates and home prices could make homeownership less accessible for many Americans, particularly first-time buyers.
Advertisement
In-Article Ad
Reader Poll
Do you think the U.S. Federal Reserve should cut interest rates in 2027?
Connecting to poll...
More about U.S. Federal Reserve
Read the original article
Visit the source for the complete story.


