8/22/25 REcap: Powell Admits: Rate Cuts Are Coming

"The shifting balance of risks may warrant adjusting our policy stance" - Powell

It was the statement heard around the world. Powell spoke at the Jackson Hole Economic Symposium and sent the stock market soaring and mortgage rates falling after admitting it's time to consider rate cuts. 

Our LendFriend Learning Center has now has over 130 articles to help homebuyers buy with confidence. Check out top articles of the week at the bottom of this email.

All Eyes On The Fed

After nearly a year of holding the line, Powell is finally ready to give Trump (and the rest of the world) what they want most — a rate cut. His Jackson Hole speech was the clearest signal yet, acknowledging that while tariffs remain an inflation risk, a weakening labor market has become the bigger threat. The Fed’s July 31st meeting minutes, released last week, confirmed that divide, with two governors pushing hard for cuts. That split set the stage for Powell’s pivot, and markets wasted no time — stocks surged and traders quickly priced in a quarter-point cut on September 17th as all but certain.

Meanwhile,  Treasury Secretary Scott Bessent has been adding fuel to the fire. He's looking to influence a bigger cut of a half-point and even suggested the “neutral” rate should be 150–175 basis points lower than where we are today. He later backtracked, saying he wasn’t pushing the Fed, just “highlighting models.” Either way, it shows just how loud the administration has become for easier policy.

But don’t forget, we’ve seen this movie before. Last September, the Fed shocked everyone with a jumbo half point cut when everyone was looking for a 0.25% cut. Mortgage rates had fallen heavily from July until the meeting, only to bounce higher after jumbo cut was announced. The point: waiting for Powell to make his move doesn’t guarantee lower mortgage rates once he actually does. I'm hopeful we'll continue to see downward pressure on the 10 year treasury as well as mortgage rates leading up to the meeting. Expectations drive the market, not the Fed calendar. That’s why we wrote an explainer on it here: How the Fed Funds Rate Affects Mortgage Rates.

Existing Home Sales

Existing-home sales surprised to the upside in July, climbing 2% to a 4.01 million annual pace. It's the first real sign of momentum in months, helped by mortgage rates easing off their May highs and a wave of new listings hitting the market.

Inventory nationwide jumped nearly 16% year-over-year to the highest level since 2020, giving buyers more options and finally starting to cool price pressure. The median price of $422,400 was flat compared to last year — a possible inflection point after 25 straight months of gains.

Here in Austin, we're right on par with the national average with inventory up 15.9% YoY and total of 6 months of supply and the median home price is down about 3.3% on the year - it's a great buyer's market out there. The best I've seen since the middle of 2020 (before the housing market went crazy). It's a great opportunity to negotiate for big discounts on home price and seller concessions.

But not everywhere in the US is like Austin. Areas in New Jersey, Connecticut and California are all still heavy seller's markets because they are still tight on inventory. Remember, real estate is still all about location, location, location!

Rate Cut Predictions 

Nothing is a foregone conclusion until we see the August labor market data next week, but we're as close to calling it as possible. Analysts currently say there's an 83.3% chance of a cut on September 17th .