Quote:
Originally Posted by Traum
So IMO, it seems more likely that as the low fixed rate mortgages become due for renewal, we're gonna see an economic slow down as people divert discretionary spendings to service their mortgage debts.
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Bingo. People thought rates would fall back down at renewal and it's not the case as of yet. It won't go back to what the interest rates were during Covid, barring a systemic event/extreme increase in unemployment.
As more people refinance at higher rates, they reduce consumption = less demand = lower profits/margins for companies = recession.
As long as inflation remains, job market is strong there should* be no rate cuts.
A rate cut is the acknowledgement that the economy is suffering (recession) and or something broke in the system. If economy is indeed strong, there is no valid reason for a rate cut because rate cuts are inflationary.