Last Week In A Nutshell Rates ended the week about 10 bps lower following renewed trade tensions with China. Upcoming Attractions  This is a light week, especially if the shutdown continues. CPI report: Originally scheduled for Wednesday, but will be released October 24, regardless of when the government re-opens because the data is used to determine cost of living increases for social security recipients. Fed speakers: Fifteen Fed speaking engagements this week, including Chair Powell’s speech at the NABE conference earlier today, where he predicted an end to the Fed’s balance sheet runoff in coming months. Postponed if shutdown continues: Retail sales (Thursday), PPI (Thursday), housing starts and permits (Friday), jobless claims (state level data still available). Last Week’s Highlights Trade tensions: In response to new controls on rare earth exports, President Trump said that the US would add an additional 100% tariff on Chinese goods beginning November 1. These moves are ahead of his scheduled meeting with President Xi later this month. Ten-year treasury…

In short: The Federal Reserve on Wednesday said it would lower its target for the federal funds rate by a quarter basis point. The Fed also forecasted two additional rate cuts this year. The move was widely anticipated, and mortgage rates aren’t likely to jump or fall much in response. The 10-year Treasury yield – which mortgage rates tend to follow – moved higher on the news.   Moving forward, the committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Reduced Fed demand for mortgage-backed securities will limit how far mortgage rates fall from here. What’s next for mortgage rates?  With financial markets anticipating a more rapid easing of monetary policy than the Federal Reserve is likely to deliver, mortgage rates aren’t likely to fall much further.  The Federal Open Market Committee anticipates the Fed funds rate reaching the 3.25-3.5% range before 2027. That’s slower than financial markets had anticipated; they projected a rapid decline to…