Mortgage Rates Hit Their Lowest Levels of the Year Following Powell’s Speech
As the week began, the market was largely focused on one event: Fed Chair Jerome Powell’s keynote at the Fed’s annual Jackson Hole Symposium. Investors and homebuyers alike were waiting to see if his remarks might spark significant movement in mortgage rates. The outcome exceeded expectations delivering a rare positive move for borrowers.
Powell’s message didn’t dramatically deviate from his July 30th address. However, coming on the heels of weak jobs data released just two days later, he highlighted a subtle but important shift in the balance of risks between inflation and employment.
In essence, Powell suggested that the labor market is softening enough to make a near-term rate cut plausible, even though inflation remains an open question. His remarks echoed a growing chorus of Fed officials in recent weeks, signaling a more cautious approach to future rate hikes.
Markets had already begun pricing in this possibility after the volatile August 1st jobs report. Powell’s speech served as further confirmation, giving both investors and mortgage borrowers reason to adjust expectations.
The reaction was swift: mortgage rates experienced their largest drop since the August 1st decline, narrowly surpassing the lows recorded on August 13th to reach the lowest levels of 2025. For context, the last time the average 30-year fixed mortgage rate dipped this low was October 3rd, 2024 a near full-year milestone.
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