Smart Mortgage Decisions and Market Impacts | Weekly Business Briefs w/ Martin Perdomo

Unlock the secrets to smarter mortgage decisions as we explore the complex world of rising interest rates and refinancing. With 30-year fixed mortgage rates at 6.6% and whispers of them sticking around for a while, it's time to think beyond just the numbers. We'll guide you through the benefits of a 15-year mortgage for those keen to pay off loans quicker and save on interest, providing you with insights to make informed and strategic moves in today's housing market.

But that's not all; we're also examining the broader economic landscape, focusing on the Federal Reserve and its response to looming tariffs that threaten to shake up multiple sectors. Discover how potential price hikes on imports could ignite inflation and strain supply chains, and why market futures are feeling the pressure with dips in the Dow, S&P 500, and Nasdaq. Yet amid these challenges, energy stocks are on the rise with climbing oil prices. Join us as we dissect the interplay of these factors and their potential impact on your investment strategies in the weeks to come.

Transcript

Speaker 1: 0:00

Welcome back to Wealthy AF Business Brief, where we break down the latest business economic trends that impact your investments and entrepreneurship journey. I'm your host, the lead strategist, martin Perdomo, and today we've got three major headlines. Let's dive right in. First, in the world of mortgages, mortgage rates continue to stay elevated as the national 30-year fixed rates rise to 6.6%, while the 15-year fixed rate stands at 5.93%. Bankers association forecast that rates may remain high for the foreseeable future, with predictions showing a slight drop to 6.5 by the end of 2025 and 6.4 by the end of 2026. Again, just predictions. These guys have been wrong before. Despite numbers, industry experts are advising potential homebuyers not to let interest rates be the sole factor in their decision-making process. Currently, refinancing rates are also on the rise, with the 30-year refinance rate sitting at 6.62%. Homeowners looking to refinance may want to consider locking in rates sooner rather than later. For those exploring mortgage options, remember that while the 30-year fixed rates provide more manageable monthly payments, the 15-year mortgage remains an attractive choice for paying off a loan faster with less interest paid over time.

Speaker 1: 1:46

In broader economic news, the Federal Reserve is sounding the alarm over mounting tariff threats that could affect multiple sectors in the economy, with US import tariffs under the spotlights. There are growing fears that we could see a significant rise in prices for both businesses and consumers. This comes after reports that tariffs could be expanded in the coming months, affecting industries ranging from manufacturing to tech. The latest round of tariffs concerns comes as the Fed tries to maintain a balance amid inflation pressures. Recent data shows that import prices could rise 5 to 8 percent depending on the scale of the tariff, which would further exuberate inflation in the already strained supply chain. The ripple effect could increase the cost of everyone's goods, from electronics to household items, putting additional pressures on consumers as the post-disposable income shrinks. With the Fed's benchmark interest rate still hovering between 5.25% and 5.5%, economists are also weighing in on whether any further hikes are necessary to curb inflation. These macroeconomic issues will likely dominate market sentiment in the months to come, and analysts are closely watching the Fed's next move, as am I.

Speaker 1: 3:28

In market news, us futures have taken a significant hit as investors grapple with growing concerns over rising tariffs and mounting geopolitical risk. As of this morning, dow Jones futures are down by 0.85%, s&p 500 futures have fallen 1.1% and Nasdaq futures dropped 1.25%. These declines follow reports that new tariffs on steel and aluminum imports will take effect next quarter after sparking fears of supply chain disruption. And today is February 20th 2025, as I record this. Economists are particularly focused on the industrial sector, with many predicting a potential increase of 2% to 3% in input costs for manufacturers. This could affect companies like Caterpillar, down 1.3% in the pre-market trading, and Boeing, which saw a 1.8% decline after warnings of higher material costs.

Speaker 1: 4:34

In addition to tariffs, ongoing tensions in Eastern Europe and in the Middle East have driven oil prices higher, with Brent crude reaching $91.20 per barrel, up 2.5% from last week. Energy stocks, including Chevron and ExxonMobil, have climbed in response, with gains of 0.7% and 0.9% respectively. Meanwhile, the bond market has seen yield US Treasury not rise to 4.1%, up from 3.9% last week, as investors move to safer assets amidst growing market uncertainty. With geopolitical risks continuing to escalate, market volatility is expected to persist in the coming weeks. So here's a quick recap because I know I gave you guys a lot here.

Speaker 1: 5:27

Mortgage rates continue to rise, with 30-year fixed rate now at 6.6%. If you're in the market to buy or refinance, keep an eye on evolving rate trends and be sure to explore your options. Two, the US Federal Reserve is closely monitoring the impact of rising tariffs, which could push consumer costs higher and complicate efforts to manage inflation. And three, the US market futures are down amid tariff fears and geopolitical risk. Market futures are down amid tariff fears and geopolitical risk, with the Dow at S&P 500 and Nasdaq all posting pre-market declines. Energy stocks saw a slight boost as oil price hit $91.20 per barrel, while bond yields continue to rise. Thanks for joining us on this week's weekly business brief. Make sure you go and you check out Wealthy AF and sign up for our newsletter so you can stay up to date on all of our updates. Thanks for listening, appreciate you and peace out.