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The Fed just cut interest rates again, this time by a quarter of a percentage point

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The Fed’s rate cut came in response to inflation heading closer to the 2% mark.  (iStock )

The Federal Reserve just cut interest rates for the second time this year, a move that was largely expected as inflation continues to drop. The Fed lowered rates by a quarter of a percentage point to 4.5% to 4.75%.

The decision came on the heels of the lowest rise in inflation since 2021. The Consumer Price Index (CPI) technically increased by 0.2% in September, but this rise was minimal compared to what consumers have seen in the last few years.

“Unexpectedly low October job growth came on the heels of better-than-expected labor market data in September that has since been revised lower,” Realtor.com Chief Economist Danielle Hale said in a meeting about the cuts.

“These data remind decision makers that it is important to consider broad trends rather than any single piece of information. As a whole, the totality of the data suggests that the labor market continues to slow, and the risks of cooling too fast or too slow are likely more balanced than was thought in early October,” Hale said.

Back in September, the Fed initially cut rates by half a percentage point to 4.75% to 5%. Both rate cuts were in response to inflation inching lower towards the 2% mark the Fed has aimed for. At this moment, it’s difficult to determine if any more rate cuts are coming down the line. 

“Financial markets fully anticipated this rate cut, and the FOMC’s statement provides no new information regarding the likelihood of future cuts,” MBA SVP and Chief Economist Mike Fratantoni said in a statement.

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THE US ADDED 818,000 FEWER JOBS THIS YEAR THAN ORIGINALLY ESTIMATED

Mortgage rates rise despite Fed’s rate cut

Not all loans and credit will follow these rate cuts. The election and its effects on the economy have a major impact on the outcome of rates as well.

“MBA expects that mortgage rates will remain within a fairly narrow range over the next year, with mortgage rates moving higher on signs of economic strength and more stimulative fiscal or monetary policy, or lower if it’s the opposite,” Fratantoni explained. “Housing markets continue to be primed for a stronger spring homebuying season, boosted by more housing supply and slower home-price growth.” 

On the heels of the rate cuts, mortgage rates actually rose last week from 6.72% to 6.79% for 30-year fixed home loans, Freddie Mac reported. Some economists cite the election results as a potential reason for the turbulent market.

“While it’s not always 100% clear what markets are thinking, they could be expecting a combination of stronger economic growth, more fiscal spending, as well as higher prices and inflation because of more tariffs and lower taxes,” Realtor.com Senior Economist Ralph McLaughlin said.

After the Trump-Vance victory, the 10-year Treasury yield jumped to the highest level since April, and typically, mortgage rates move in the same direction as the 10-year yield. This wasn’t the case this past week.

“While we still expect mortgage rates to stabilize by the end of the year, they will likely be at a higher level than markets were initially expecting prior to election week,” explained McLaughlin.

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HOUSING BEGINS TO TIP IN FAVOR OF BUYERS; SELLERS SLASH PRICES TO ENTICE THEM BACK TO MARKET: REPORT

The homebuying market has the potential to rebound in 2025

Despite hard times for mortgage rates, there is some optimism among experts in the mortgage industry, although it’s difficult to predict exactly when prices and rates may drop.

“The Fed’s rate cut was widely anticipated and unlikely to herald in much of a change for the housing market. Potential homebuyers will be disappointed to see that mortgage rates remain stubbornly high, as it also moves with the 10-year Treasury, so the markets will only slowly begin to normalize,” CoreLogic Chief Economist Dr. Selma Hepp said in a statement. “We anticipate a much more improved rate environment for homebuying next year.”

Homebuyers have, by in large, been dragging their feet on homebuying. Many homeowners currently have mortgage rates below 6%, so they’re not selling their homes. Homes that are on the market are sitting there for longer as buyers wait for volatile rates to settle.  

“Despite these challenges, Americans remain optimistic about homeownership, and homebuilders are positioned to fill in the gaps, especially if policy makers at the federal, state, and local levels can clear challenges to building,” said Hale.

“While existing home sales continue to tread near 30-year lows, new home sales remain on par with a pace similar to 2019, and even as existing home prices continue to climb, a focus on smaller-footprints and affordability has kept new home prices more steady,” further explained Hale.

If you think you’re ready to shop around for a home loan, use Credible to help you easily compare interest rates from multiple lenders in minutes.

MORTGAGE PAYMENTS SOAR FOR PROSPECTIVE HOMEOWNERS IN SWING STATES: REALTOR.COM

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Apple iPhone assembly in India won’t cushion China tariffs: Moffett

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Street's biggest Apple bear says a production move to India is unrealistic

Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.

Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.

He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.

“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”

Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.

“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.

Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.

“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”

Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.

“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”

Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.

“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”

According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.

“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”

Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.

To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5, at the Nasdaq in Times Square.

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Warren Buffett’s top stock picks come with 15% income bonus in new ETF

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Invest like Buffett: VistaShares CEO on new ETF that follows the investor

In a year that hasn’t been kind to many big-name stocks, Warren Buffett’s Berkshire Hathaway is standing near the top. Berkshire shares have posted a 17% return year-to-date, while the S&P 500 index is down 6%.

That performance places Berkshire among the top 10% of the U.S. market’s large-cap leaders, and the run has been getting Buffett more attention ahead of next weekend’s annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska. It’s also good timing for the recently launched VistaShares Target 15 Berkshire Select Income ETF (OMAH), which holds the top 20 most heavily weighted stocks in Berkshire Hathaway, as well as shares of Berkshire Hathaway. 

Berkshire is currently the biggest holding in the ETF, at 10.6% of the fund. Other top holdings in the ETF from among the ranks of Berkshire’s biggest bets include Apple, American Express, Kroger, VeriSign, Bank of America, Citigroup, Visa and of course Coca-Cola, a long time favorite of the man known as the Oracle of Omaha.

“It’s a really well-balanced portfolio chosen by the most successful investor the world has ever seen,” Adam Patti, CEO of VistaShares, said in an appearance this week on CNBC’s “ETF Edge.”

Berkshire’s outperformance of the S&P 500 isn’t limited to 2025. Buffett’s stock has tripled the performance of the market over the past year, and its 185% return over the past five years is more than double the performance of the S&P 500.

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Berkshire Hathaway is one of 2025’s top performing stocks.

In addition to this long-term track record of success in the market, Berkshire Hathaway is getting a lot of attention right now for the record amount of cash Buffett is holding as he trimmed stakes in big stocks including Apple, which has proven to be a great strategy. The S&P 500 has experienced extreme short-term volatility since President Donald Trump’s inauguration on January 20. Even after a recent recovery, the S&P is still down 8% since the start of Trump’s second term.

“The market has been momentum driven for many years, the switch has flipped and we’re looking at quality in terms of exposure, and Berkshire Hathaway has performed incredibly well this year, handily outperforming the S&P 500,” said Patti.

Berkshire Hathaway famously doesn’t pay a dividend, with Buffett holding firm over many decades in the belief that he can re-invest cash to create more value for shareholders. In a letter to shareholders in February, Buffett wrote that Berkshire shareholders “can rest assured that we will forever deploy a substantial majority of their money in equities — mostly American equities.”

The lack of a dividend payment has been an issue over the years for some shareholders at Berkshire who do want income from the market, according to Patti, who added that his firm conducted research among investors in designing the ETF. “Who doesn’t want to invest like Buffett, but with income?” he said.

So, in addition to being tied to the performance of Berkshire and the stock picks of Buffett, the VistaShares Target 15 Berkshire Select Income ETF is designed to produce income of 15% annually through a strategy of selling call options and distributing monthly payments of 1.25% to shareholders. This income strategy has become more popular in the ETF space, with more asset managers launching funds to capture income opportunities and more investors adopting the approach amid market volatility.

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More Americans buy groceries with buy now, pay later loans

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People shop for produce at a Walmart in Rosemead, California, on April 11, 2025. 

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said. 

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.  

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once. 

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.” 

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers. 

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts. 

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