Posted on 08/28/2025 5:56:23 AM PDT by Red Badger
Economic growth for the second quarter was revised up three tenths of a percent to 3.3%, the Bureau of Economic Analysis said Wednesday in its first revision of the data.
The report is the second of three estimates for gross domestic product. The headline number can change during such revisions. Still, whatever the final GDP number for the second quarter is, it has shown that the economy bounced back after a contraction in the first quarter.
(Excerpt) Read more at washingtonexaminer.com ...
A hot economy is not where you want to drop rates.
I think this is mostly an accounting issue because people were front running tariffs in Q1. We will need to see what happens in Q3/Q4 to get a better handle.
While this is great news overall, its just part of the story.
It is not a hot economy for the housing industry. Nor for people with credit card debt.
Lowering rates saves literally billions of dollars in debt servicing costs, which are now over a trillion dollars annually. The Fed has kept rates artificially high. They are crippling our economy.
I don’t agree that the current rates are “artificially high”. They’re perfectly in line with historical norms, if you look further back in history than just the last 16 years.
>>>accounting issue because people were front running tariffs in Q1
I always thought the stockmarket was front running or a leading indicator of the economy? Never liked the term ‘front running’!
I can hardly wait for the “experts” to weigh in on why this is BAD for the economy…..
By artificial, I mean that the rates are higher than necessary given the current economic conditions. Reducing the rates will fuel the lousy housing market and give relief to those holding significant credit card debt. It puts more money into the economy. And internationally our rates are an outlier.
Mortgage Rate History | Chart & Trends Over Time 2025
Interest rate history graphs from sources like FRED (Federal Reserve Bank of St. Louis) and Trading Economics show significant volatility, with the U.S. 30-year mortgage rate peaking at around 18.63% in 1981 and dropping to a record low of 2.65% in early 2021 before rising again. Current interest rates are near the long-term historical average, but significantly higher than the pandemic-era lows, reflecting a shift from the historically low rates of the early 2020s.
Key Historical Trends
Highs in the Early 1980s:
The early 1980s experienced very high interest rates, particularly in 1981, with the 30-year mortgage rate reaching 18.63% and the Fed Funds Rate peaking at 20.00% in March 1980.
Lows During and After the Financial Crisis:
Following the 2008 Great Financial Crisis, interest rates reached record lows, such as the Fed Funds Rate at 0.25% in late 2008 and the 30-year mortgage rate falling to 2.65% in January 2021.
Recent Increases:
Rates began to rise significantly again in 2022 and 2023, with the 30-year mortgage rate surpassing 8% by late 2023 and remaining elevated into 2025.
Mid-1970s to Late 1990s:
Interest rates were generally higher during this period compared to recent years.
No doubt & clouded with a layer TDS. Still it’s entertaining!
Too late Powell, meet too late Vermont Lt.
The job market is starting to wobble. The real estate market is moribund.
It’s long past time to cut interest rates. Anyone knowledgeable realizes that.
My first house mortgage was something like 13%. This in 1983, before Reaganomics had had time to kick in. When we refinanced a few years later, it was at something like 8.5 or 9, and we went from a 30 to a 15 year mortgage and kept the same payment.
Yes, my first mortgage in 1990 was 10.375% on a 30 year note. However, my mortgage amount was 100K. The house was $125K. Eventually I refinanced it down to 6.75%.
Today that same house is worth around $450K. So, if someone was going to buy it now their per month would be probably three to four times what my monthly payment was.
That was the largest debt I ever took on. When I bought my second house and sold the first one in 1995 my next mortgage was $80K. On a house that cost $170K.
I sold that house 17 years later. I borrowed $70K on my third house @ 2.375% for 15 years on a house I paid $270K.
I paid that mortgage off three years ago. Even though the rate was the lowest in my lifetime. There is no tax benefit the last couple years of a 2.375% loan. So, I paid it off.
That house 15 years later is now worth $675K.
I COULD NOT AFFORD TO BUY MY HOUSE TODAY. This is the problem for most borrowers. The price of a house exceeds their income. So, unless you have a lot of equity in another house then they can not afford the payment.
Just a little note: The last time Powell started lowering rates inflation was at 5.1%.
For what it’s worth, gaming revenues down in Vegas. Housing market stagnant. Traffic on the Strip seems down. Then again, prices have soared in recent years. Crazy. Unions now operate in every Strip Casino.
You should be compensated for some amount over inflation—to take the risk of lending money. After all when you lend money (individuals, banks, or whatever)— you take all the risk of being paid back.
Vegas is too expensive for the younger crowds now.
And too dangerous for all ages...................
The bigger problem with the housing market is the low supply. Builder can't build a house for less than 350-400 and make money nowadays. A 400k house at current rates is out of reach for many new home buyers with a small down payment. And forget about a 600k house.
I absolutely do NOT believe that rates should be pushed back to near zero however. Having zero percent interest rates for too long presents its own set of problems, and it also unfairly punishes people who are doing the right thing by saving some cash reserves for retirement and for potential emergencies that might come up in their life.
Finally, regarding the national debt, it is absolutely NOT in any way shape or form the job of the Fed to encourage our so-called "leaders" in their wild, out of control borrow-and-spend ways they have been engaged in for way too long. The Fed is not to blame for the fact that our debt has gotten so damn high, that's the responsibility of Congress to manage that. Additionally, even if the Fed does lower their rate, that doesn't necessarily automatically mean that demand for government bonds is going to go up. Bond prices are mostly determined by the free market. Though the Fed does have some tools they can use to try to manipulate these free market bond prices, those tools will eventually become ineffective if we continue borrowing trillions of dollars every year.
Great point.
Supply is also a function of capital and interest rates. I bought my first home in 1979 at a mortgage rate of 10.5%. Years later I was able to refinance at 7%. What a difference in the monthly house payment.
Another factor affecting supply was open borders that allowed 10 to 20 million illegal aliens in over four years. Add another 1.1 million permanent legal immigrants each year and you have a rapid increase in demand. Groups like Black Rock are buying up housing raising rents.
3.3% growth is not “hot growth”.
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