After mortgage rates reached as high as 8% in October 2023, the Federal Reserve paused on hiking the Fed funds rate and said it would cut interest rates three times in 2024. The timing of those cuts has changed from March to May, despite PCE inflation falling below the Fed’s 2% target over the last six months. Inflation levels and labor market dynamics continue to influence the Fed’s policy on rates, and we are keeping a close eye on those variables and how the Federal Reserve is reacting.