President Trump was sworn into office last week and has already made BIG splashes with his policies and his speeches. One of those splashes was when he told an assembly of global leaders at the World Economic Forum that “I’ll demand that interest rates drop immediately, and likewise, they should be dropping all over the world. Interest rates should follow us all over.”

It's a shot at Powell, who this Wednesday at 2:30ET/1:30CT will take the main stage to announce the Fed's decision on the Fed's Funds Rate, give the Fed's view on the state of the economy AND likely fire back at Trump's commentary.

Trump's speech did little to move rates last week. The average rate on a 30-year fixed rate conventional loan inched up to 6.94% (from 6.91%). Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week! It's a must for anyone planning to buy or refinance in 2025! 

The 2024 Housing Market

Existing home sales for December 2024 reported last week, and as predicted, high mortgage rates and record home prices contributed to another low transaction volume year.  Sales of previously owned homes, which make up the vast majority of the market, totaled 4.06 million in 2024, which is the lowest level since 1995 and slightly below 2023’s levels.

However, that doesn't mean that home prices are coming down. In fact, the median price of an existing home has climbed for 18 months straight, reaching a record high of $407,500 in 2024. While the housing market is slow or even "frozen", there's signs that its thawing out.


In the final month of the year, existing-home sales rose to a seasonally adjusted rate of 4.24 million. According to NAR Chief Economist Lawrence Yun, “Home sales in the final months of the year showed solid recovery despite elevated mortgage rates. Home sales during the winter are typically softer than the spring and summer, but momentum is rising with sales climbing year-over-year for three straight months. Consumers clearly understand the long-term benefits of homeownership. Job and wage gains, along with increased inventory, are positively impacting the market."

Jobless Claims Keep Rising

The only consistent picture we have of the labor market, other than the monthly Jobs Report and the PCE Index, is weekly jobless claims, and those numbers are starting to tell an interesting story. Initial jobless claims have been higher than expected for the last few weeks and continuing claims are currently at the highest level they have been since November 2021. The rising level of continuing claims, which is the total number of Americans collecting jobless benefits for more than 1 week of unemployment benefits, suggests that those who are receiving benefits are finding it harder to land new jobs. If the trend continues this week, I expect the January jobs numbers released next week to be much more subdued, which will be great for rates.

When's the next rate cut?

Analysts believe there's a 99.5% chance that Powell will NOT cave to Trump's demand for lower rates.  The optimist in me believes that we could see our next rate cut May 7th! But, we'll need to see better data by then.