One big factor in that affordability question is mortgage rates. They’re cheaper than they were at the start of the year, but they perked up a bit after October. That’s largely because of questions in the bond market about how much more the Federal Reserve will cut its main interest rate.
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The widespread expectation is that the Fed will cut interest rates Wednesday afternoon, which would be the third such easing of the year. Lower interest rates can give the economy and prices for investments a boost, but the downside is they can worsen inflation.
The US stock market has run to the edge of its records in part because of the near assumption that the Fed will cut rates again on Wednesday.
The big question is what the Fed will say about where interest rates will go after that. Many on Wall Street are bracing for talk aimed at tamping down expectations for more cuts in 2026.
Inflation has stubbornly remained above the Fed’s 2 per cent target, and Fed officials are notably split in their opinions about whether high inflation or the slowing job market is the bigger threat to the economy.
Treasury yields climbed in the bond market after a report on Tuesday showed that US employers were advertising 7.7 million job openings at the end of October. That’s up a smidgen from the month before and the highest since May.
If the job market is not worsening, it may not need as much help from the Fed through more cuts to rates.
After the report on job openings came out, the yield on the 10-year Treasury erased what had been an earlier dip and was sitting at 4.17 per cent, where it was late Monday.
The yield on the two-year Treasury, which moves more closely with expectations for what the Fed will do, rose to 3.60 per cent from 3.57 per cent late Monday.
Elsewhere on Wall Street, the market’s most influential stock, Nvidia, slipped 0.3 per cent after President Donald Trump allowed it to sell an advanced chip used in artificial-intelligence technology to “approved customers” in China. The H200 is not Nvidia’s top product.
In stock markets abroad, indexes were mixed across Europe and lower across much of Asia.
Indexes fell 1.3 per cent in Hong Kong and 0.7 per cent in Paris for two of the world’s bigger moves.
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