WebCE's Weekly Wrap-Up: September 14-20

“Recalibration.” 

That’s how Federal Reserve Chair Jerome Powell characterized this week's decision to lower interest rates by a half percentage point. This pivotal move sent ripples through financial markets, impacting a wide range of industries.  

From the stock market to the housing sector, the Fed’s rate cut easily became the week’s top story as experts across the country weighed in on the potential ramifications.  

Here are the latest insights across investing, insurance, and real estate.  

Top News Stories of the Week

Federal Reserve’s Official Statement on the Rate Cut (Federal Reserve)

“In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent.”

Fed Slashes Interest Rates by a Half Point (CNBC) 

“We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation,” Chair Jerome Powell said at a news conference following the decision. 

The Fed has set out on a ‘recalibration’ of policy. Here’s what Powell’s new buzzword means (CNBC) 

“This recalibration of our policy stance will help maintain the strength of the economy and the labor market, and will continue to enable further progress on inflation as we begin the process of moving forward a more neutral stance,” Powell said. 

4 Ways the Federal Reserve's Big Rate Cut Could Change the Housing Market  (NPR) 

“Lower mortgage rates may not make it easier to buy a home. In fact, it could make it more difficult and lead to higher home prices.” 

Real Estate Agents Have Mixed Feelings About Fed Rate Cut (Housing Wire) 

“In conversations with HousingWire, agents from across the country said they don’t think the larger-than-expected rate cut will have much more of an impact on the housing market than if they’d gotten the one they did expect.” 

Wall Street Strategists Weigh in After Powell's Power Move (Investment News) 

“As market players were gobbling up stocks, Wall Street strategists were offering their spins on the Fed’s latest maneuver and its potential impact going forward.” 

Insurance experts see good news after Fed cuts rates by a half-point (Insurance News Net) 

"While there may be short-term disruptions to some indexed products, the overall effect is net positive." 

US Property/Casualty Industry Records $3.8 Billion Underwriting Gain in First-Half 2024 (AM Best) 

“The U.S. property/casualty (P/C) industry recorded a $3.8 billion net underwriting gain in the first half of 2024, a significant improvement from the $24.0 billion loss recorded in the same prior-year period, according to a new AM Best report.” 

US Property Insurance Rates Fall for First Time Since 2017 (Insurance Journal) 

“US property insurance rates are decreasing for the first time in almost seven years, after insurers returned to profitability amid lower losses tied to catastrophes.” 

Mortgage Rates Drop to Lowest Since Early February 2023 After Fed’s jumbo Interest Rate Cut (CNN)  

“The standard, 30-year fixed-rate mortgage averaged 6.09% in the week ended September 19, Freddie Mac said Thursday, down from last week’s 6.20% and substantially below a two-decade peak of 7.79% seen last fall. It’s the lowest level since early February 2023.” 

Top Podcast of the Week

Why the Fed Went Big With Its Rate Cut (What’s News from The Wall Street Journal)  

“WSJ economics reporter Paul Kiernan discusses the Federal Reserve’s decision to cut interest rates 0.5%—its first reduction since 2020.”