Market Update: Rates Unchanged Over Past Month; Trade Deals Could Change Things

Blog posted On May 09, 2025

Over the past month, mortgage rates have more or less been trending around the same levels. There have been little ebbs and flows here and there with different economic data releases, but for the most part, they have been steadily trending just under 7%. However, things could change over the weekend with the upcoming meeting with China.  

The Fed left rates unchanged. Was it the right decision?  

The Federal Open Market Committee (FOMC) met this week and ultimately voted to leave the benchmark interest rate unchanged. Their reasoning was that they think the costs of waiting are fairly low. However, some experts think this could be a mistake due to the lag it takes for a cut to ‘show up’ in the economy, and by not cutting soon enough, the Fed could send the economy into a recession. The latest CNBC Fed survey showed a surging likelihood of a recession in the next year and increased outlook for inflation & unemployment. The UK bank cut their benchmark rate by 25 basis points. Therefore, some economists think the US markets are overpriced right now. If a recession does occur, rates will likely trend lower.  

How are consumers feeling?  

The New York Fed consumer expectation survey was consistent with the CNBC findings, showing expectations for higher inflation, lower income, and a weak job market. They expect unemployment to rise throughout the year.  

Trade deals could change everything 

Ultimately, a lot of these predictions and market movement hinges on the tariffs and trade deals going forward. The US made a deal with the UK this past week and is expected to have a discussion with China this weekend. If they fail to strike a deal, the markets could look different come Monday.  

Have any questions? Let us know.  

Sources: CNBC, Mortgage News Daily