Markets Whiplash on Fed Flip

Mortgage rates, Fed, market update, inflation, housing, mortgage-backed securities.
A wild ride for markets last week — stocks slid, crypto sank, and mortgage bonds whipsawed — all on shifting Fed rate-cut expectations. In this week’s Master the Markets, host and expert Bill Bodnar breaks down how the narrative changed almost overnight.
Early in the week, several Fed officials downplayed the chance of a December rate cut, leaving markets uneasy. But by Friday, New York Fed President John Williams flipped the tone, suggesting we’re living in a “low neutral rate” world — where the long-run Fed Funds rate could sit closer to 2.5%, similar to pre-pandemic levels. That single remark lit a fire under bonds, sending yields lower and optimism higher.