The Fed Funds futures now see 3 cuts this year – The Daily Tearsheet

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are down small.

What a difference a day makes. The BLS revision caused the Fed Funds futures to completely re-assess the future path of rate. The September futures now see a 90% chance of a cut compared to 40% after the FOMC meeting. The December futures went from predicting one cut this year to three:

The unemployment rate has been held down by a declining labor force participation rate. When someone has been unemployed for six months, they no longer count as unemployed. The transition to the “NILF” or not in labor force category. If they were still counted as unemployed, the unemployment rate would be much higher, probably in the upper 4% range.

The Fed released its Senior Loan Officer Survey yesterday, which indicated that demand for loans is slowing and lenders are tightening standards slightly. In residential mortgages, banks left standards more or less unchanged, although they did tighten standards somewhat for home equity products. So far we haven’t seen major problems with commercial real estate for most banks.

Tools for Mortgage Originators

It’s August, and that means one thing for the mortgage banking industry: It’s time for the California MBA’s 2025 Western Secondary Market Conference. Western Alliance Bank’s Specialized Mortgage Services Group looks forward to seeing you there, Aug. 11-13, 2025, at Terranea Resort Palos Verdes, CA.

Additionally, as your hosts of the All-Attendee Party on the first night of the conference, Western Alliance Bank and its wholly owned subsidiary, AmeriHome Mortgage, invite you to join them on Monday, Aug. 11, from 6- 9 p.m., on the 4th Floor Terrace.

Western Alliance Bank, Member FDIC, is extremely proud to again be a key sponsor of this year’s Western Secondary Market Conference and a President’s Council Sponsor of California MBA. The team extends its deepest appreciation to California MBA CEO Susan Milazzo and everyone at the California MBA for their efforts advocating for the mortgage banking community.

Western Alliance Specialized Mortgage Services has the tools to help independent mortgage bankers (IMBs) succeed through a customized suite of solutions that include mortgage warehouse lending, MSR financing, note financing, customized cash management tools and a whole loan trading desk focused on purchasing scratch & dent loans. These capabilities are backed by advanced data and analytics capabilities, plus fraud protection services to defend what you’ve built. 

“The Western Alliance Bank Specialized Mortgage Services Group prides itself on the team we’ve assembled to work directly with long-term business partners,” said David Bernard, senior managing director of Specialized Mortgage Services. “We appreciate hearing our customers provide consistent feedback about how nice it is to work with a cash management team that truly understands the needs of IMBs in all aspects of mortgage finance.”

To learn more about how Western Alliance Bank can tailor solutions to help drive profitability, reach out to the Specialized Mortgage Services Group.

________________________________

Mortgage rates have fallen to the lowest level in 10 months, which is giving buyers more purchasing power. “This dip in mortgage rates gives house hunters a window of opportunity to buy before summer ends,” said Daryl Fairweather, Redfin’s chief economist. “While housing costs are still fairly high, the recent decline in rates boosts purchasing power and improves overall homebuying conditions. Combined with the surplus of homes for sale on the market, serious buyers may want to jump in sooner rather than later.”