S2025 Ep267: The Rate Update — NO RATE CUT: Fed Warns on Inflation Spike — What Homebuyers Need to Know NOW

So you've so certain that tariff-related price increases will be a one-time effect.

I don't think we've seen you since the Supreme Court tariff decision.

And it's pretty clear that none of us know what the extent of the tariff shock will be as the

administration moves to replace some of the tariffs that were overturned. So I suppose I'm curious

what would make you question this certainty that tariffs are going to be a one-time price effect?

Well, I would not at all use the word certain about my views on that. I'm not certain. I'm uncertain.

And that's why the markets are doing what they're doing. So yesterday we had the Federal Reserve

come out and they didn't do anything. Well, that was expected. And then stocks crumbled mortgage

rates jumped and we're also seeing mortgage rates jump again this morning. So what I want to do is I

want to talk to you guys about what's happening today in mortgage rates because if you're watching

this video, hopefully your homeowner, home buyer, realtor, maybe even the loan officer trying to

figure out, okay, the Federal Reserve didn't cut yesterday, but mortgage rates went up yesterday.

And they look like they're going to go up once again today. So what's going on? So the biggest

thing I want to talk about today is uncertainty. We have uncertainty in the Middle East. We have

uncertainty with the jobs report numbers. We have certainty, uncertainty with inflation. But it's

finally nice to hear from the Federal Reserve saying really uncertain. So I want to go back to this.

I call this the money ball number or money ball question of the day. This is a question I wish I

could ask. So let's get back to Federal Chairman Powell. He's going to actually explain kind of how

inflation works and how tariffs should be a one off. It's much different than true inflation.

And then also he talks about oil how this oil jump might be short lived as well. So let's get back

to Federal Chairman Powell. Then I'm going to show you market reactions. Actually what happened

with mortgage rates yesterday wasn't good news. And that bad news looks like it's going to continue

today as well. So let's get back to Federal Chairman Powell to see how he answers this question.

And I wish I could ask it. But just if you think about what it is, it's a one time

increase in the price of a good. And what inflation is is ongoing increases in prices this year

next year, the year after. That's what inflation is. It's not a one time price increase. There's a

very, very big difference. The public doesn't really focus on that. But that's the difference. And

tariffs should be in theory unless they cause people to start expecting still more tariffs

the next year and still more tariffs the next year. They should be a classic one time thing.

People say the same thing traditionally about an energy price spike because traditionally

prices go up and they come back down. And by the time monetary policy would react, you know,

you would it would be over. So that's why they didn't cut yesterday. They're like, okay,

inflation, yeah, it's higher. And we think it's higher because of in tariffs. And then it's going

to get even higher because of oil. But he's saying tariffs are one off and same thing with oil.

So what's going to happen when all this settles? Let's try to figure that out. First thing I want to

let you guys was, why do we follow the Fed? Well, they were created for two reasons. One was

price stability, AK inflation to try to keep inflation in line. How they do it? They control

interest rates. Okay, that's number one. Number two, their mandate is maximum employment.

So they want to keep the unemployment rate below 5%. So we got news, actually this morning,

if we go to the economic calendar on the jobs numbers. So here's what we're going to look at two things.

We're going to look at how many people got let go. Okay, so that's that's not good news.

But were they able to be absorbed back into the market? We're going to look at continued claims.

Because if you got let go and got a job the next day, okay, that's a net neutral. I'm going to pick

up your life a little bit. But let's get over what these numbers look like. So if we go through here,

we had initial jobless claims come in this morning. Last reading was 213. It was supposed to increase

to 215 dropped to 205. So less people got let go. So let's go down to continued claims or up to

continued claims. And it's 1.84 million previously. It was supposed to be at 1.85 came to 1.85.

Okay, so this came in a point. This came in a little bit better. And then if you go up through

yesterday's inflation numbers, this is where I thought, okay, this is bad. You have inflation,

the PPI, producer inflation. Last reading was 0.5. It went to 0.7. Well, could this be tariffs?

Okay, so that's what the federal chairman's saying. But the question here is uncertainty. Is it?

Is it going to go away? How long is it going to last? Now you have the Middle East problem. And

you have oil over. Well, let's talk about that for a second. Let's get over to the stock market.

I'm going to get to the bond market in a minute on where mortgage rates are going to go. But here's

one I just want to teach you a mainstream media tactic they're using. Okay, so let's look here.

Oil briefly hits $119. And oil, European gas prices surge. Well, every day we talk about this

oil price right through here. If you look at it, it's $96 a barrel. Okay, so now it mainstream media is

doing. They're going over to Brent. Okay, yeah, that's oil. But we don't track this. If you're watching

oil, please just watch oil. Actually, it just petered down just a little bit. So it's a $96 a barrel.

Let's get over to the markets. See how they're fairing for the day or is it open yet? No,

markets are not open yet. They're not looking like a good day so far here. We got the Dow Jones

down 300 points. Brent oil jumps and that's what's causing the havoc. But is we look at the

Federal Reserve chairman? Okay, tariffs there in here. We know they're redeemed illegal, but they

got kind of put back into place. So we kind of know those are there. Now we have this oil shock

and over the next couple of readings for the inflation numbers. It's going to be high because oil

did reach $100 and some dollars of barrel recently. So inflationary numbers coming down the

pike are going to be high. So now what do you do? Okay, so now let me give you my thoughts on this.

So let's just look at let's scroll back to where we were before. Let's say a couple months ago.

Federal chairman Powell kept coming in saying we were in the right direction. We had inflation

coming down. They did. Inflation was 8% three years ago. Now it's at three. Okay, that's a pretty

big move. They just can't get it down to 2%. Well, they were on their way down and then oil

happened and all these other things. So right through here when you got the inflation numbers,

this is what the Federal Reserve watches. It's at 3% or higher. And then you got the jobs market

that's good. It's under 5%. That's full employment. Then you have GDP in his speech yesterday.

Federal chairman Powell said the GDP for this year is going to be 2.4. Okay, so good GDP.

An unemployment rate that we've seen for the last two years being pretty steady. And then

inflation that's at three, but he's saying, okay, tariffs are one off and oils are one off.

So if you look at all this, where should we be? Okay, so let me give you kind of my forecast.

If we go over to here, the Federal Reserve, they're meeting in 41 days. I'm just let's just look

at this for kicks. There's a 93% chance. What's they going to do? Let's go to probabilities and see

where this is. There's a 93% chance they're not going to do anything. Okay, so it's still loud. It's

not looking like here's what's here's where the markets are kind of getting getting hit. Now they're

saying there's no rate cuts this year because this oil thing could be pushed us into Q2, Q3, Q4.

And that could raise havoc. And so now they're saying there is basically a 90% all the way down to

next year of no rate cuts this year. So now you're going to see rates start to move. Okay, so what do

you do if you're a homeowner, you're looking to buy? Okay, so if you're a homeowner right now,

hopefully you use our tools. Let me show you a tool I have for you. If you're a homeowner,

put your mortgage information up there. Please rate watch 2.1. Here's what I want you to do.

Putting your mortgage information, let me know two things. What rate you want to be contacted

to see if it saves you some money. So let's say you're 7% and you're like, Dan, when it hits six,

call me, text me, email me. Let's go over the numbers. See if it makes sense to refinance.

That's what we'll do. We don't sell the data. But 2.1 does is now you can say, okay, Dan, I want to save

300 bucks a month, 400 bucks a month, put it in there. When it hits that, I'll call you text

emails as well. And if you're a home buyer, what do you do? Reach out to us. We'd love to help you.

Here's what I do. And then I'll give you my forecast. Should you lock? Should you float? What should

you do? Okay, so my name is Dan Frio. I'm a licensed mortgage loan officer in all 50 states as

well as Puerto Rico. So if you're anywhere in the country, I'd love to help you. I've been doing

this for over 35 years. Here's the cool thing. We're going to bank. This bank provides me licensing

in all 50 states. But they're also set up with over almost 40 other lenders. What they did is they

came to us and said, would you need to be more productive? I'm like, I'm the rate update. I need more

rates and products. Okay. So now we're set up with almost 40 different lenders. So instead of you

going out there and putting in your application there, there, that credit union, that bankrate.com

lending tree, having your all your mortgage data sold, credit pooled. And then once you get

quotes, you don't really know what's going on anyways. We talked to us. We'd love to help you.

So we're going to do all that for you. We're going to scan almost 40 different lenders to see

kind of rates. Can we get you? So join me today. I'll have a live event. I'll post that right up

through here. I'm going to do this at the last minute to show you behind the scenes. Exactly

how we do this. So what should you do if you're looking at these rates right now if you're a home

owner home buyer, you're looking to build? Well, here's what I'm expecting. I don't know if I'd

be locking in at these levels. I don't I think we're basically at the high end or we're going to be.

Yes, it can take up a little bit more today. And I'll show you the charts here in a second. But

if you're looking to buy or build down the road, I would get pre-approved. Use a rate at 6.5%

just to be careful. Okay. When you get pre-qualified, ask them, put in 6.5%. Reach out to us. We'll

get you pre-qualified. And here's the reason why we do that. If you can get qualified at 6.5%

rates might get there. And you qualify, you're good. Because I'm thinking this is the high end of

rates. So the rates come back down to 6.40. You realize there are 5.99 about two, three weeks ago.

You missed it. Well, if you're a homeowner, don't miss it again with our tools right through here.

So the bond market today, let's get back to it. The bond market that we follow each day right

through here, it is down 19 ticks. This is not good news. But the good news is it was down over 30

points earlier. So how you'd read this thing, if that number up there is red, that's bad news.

That means mortgage rates are going up. The bigger the number, the bigger the adjustment.

This adjustment will probably put us right in the range of about 6.4 today. My forecast for this

quarter was 5.875 to 6.4. Yeah, we're over that. I might have to change those projections.

But like Federal Chairman Powell said, I'm really unsure how long this conflict is going to last,

how long these tariffs inflation is going to last, and when things can turn on a dime.

President Trump said the other day, when this end war ends, oil prices are going to drop like a rock.

That's what I'm expecting. So once oil prices start to drop, you're going to see all these things

follow suit. But until then, follow oil, follow the Iranian conflict. That's going to tell you exactly

where the markets are taking us from there. So folks, my name is Dan Frio. If you need any help with this,

getting a mortgage, home equity loans, or even a reverse mortgage, I'd love to help you.

But join me on my live events each week that I hold. I think you're going to learn a lot

something. But subscribe over there. You realize I have over 7,500 videos out there,

something out there. It's got to be something that you can learn. And our whole goal here is to

help you understand what's going on with these and help homeowners basically go from application

to keys in their pocket or for homeowners to basically get their keys, their mortgage statement

reach out to us and drop those payments. So thanks for watching folks. Don't forget to

subscribe. I'll be back here later today on our live event. But have a great day. Be safe.

And I'll see you next time. Bye bye.