North Texans react to Fed interest rate cut

NORTH TEXAS – Whether it's topping off the tank or restocking the pantry, inflation-fueled higher prices have been a near-universal concern.

News of a Federal Reserve interest rate cut sounds like a good idea, especially if you're carrying balances on a credit card or looking to buy a home. However, some experts say the immediate impact might be mostly mental.

"Even though the Fed may cut their rates, that does not mean that (mortgage) interest rates are gonna drop," said Geni Manning, a veteran North Texas realtor. "They don't go together always."

Manning said many lenders already anticipated the Fed rate cut and mortgage rates were already easing down. Still, she said the factors that influence mortgage rates are complicated, so she's urging would-be buyers to avoid trying to "time the market." As Manning explained, lower mortgage rates will attract more buyers competing for available housing stock—and that drives housing prices up.

"There's a saying called 'marry the house, date the rate,'" said Manning. "You can always refinance later."

And with the economy still relatively strong, not everyone agrees that a rate cut right now is the right move.

"This might sound cynical," said Michael Cox, an economist at the SMU Cox School of Business, "but it's the Fed that would benefit. It has become afraid of not doing what the politicians want it to do, on each side of the political aisle."

Cox is an executive in residence at SMU's Cox School. No relation, but lots of experience. He has spent more than two decades working for the Federal Reserve and is a former chief economist with the Dallas Federal Reserve. Right now, he is very critical of the current Fed policy.

"You have to be worried about one thing," said Cox of the Federal Reserve's primary responsibility, "inflation, keeping it down. And the opposite of keeping inflation away is to cut interest rates. I want a Fed which does the right thing… and that's be tough on inflation, and that's good for growth in the long run."