Mortgage Interest Rates

Over the past several weeks, there has been a notable convergence between the markets expectations for interest rate cuts in 2024 and the Fed’s guidance. At the beginning of the year the market was pricing in roughly six 0.25% interest rate cuts in 2024, while the US Fed implied just three 0.25% interest rate cuts.

Stronger US economic data, specifically in employment and inflation, has led the market to significantly dampen down its expectations for the coming year. Today, the market is close to agreeing with the Fed, with little over three 0.25% cuts expected, with the first beginning in either June or July.

Closer to home, the market has followed a similar path, with the ECB expected to cut less than four times, with the first cut coming in June.

Source: Bloomberg / Goodbody Asset Management.