The Federal Reserve continues to hold fast to its restrictive monetary policy and has not started cutting rates, despite inflation dropping below its 2% target. After mortgage rates reached as high as 8% in October 2023, the Fed stopped raising the Fed funds rate and said it would begin rate cuts in 2024. Three rate cuts were widely expected, but the strength of the labor market has pushed out the timeline for those cuts again and again. There is some current optimism about seeing a rate cut at the Fed’s September meeting, depending on labor market performance.