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Will the Federal Reserve take us back to an era of cheap money?

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Will the Federal Reserve take us back to an era of cheap money?


Investors celebrated what could be the return of an easy money era after the Federal Reserve cut interest rates for the first time since March 2020 and projected rates may decline even further over the next two years. 

Chairman Jerome Powell was asked by FOX Business’ Edward Lawrence whether the U.S. could be headed back to a time when rates hovered near zero, or so-called cheap money.

It’s just a great question that we can only speculate about intuitively,” Powell said. “My own sense is that, that we’re not going back to that. But, you know, honestly, we’re going to find out. But, you know, it feels to me that the neutral rate is probably significantly higher than it was back then. 

“How high is it? I just don’t think we know.”

THE FED CUTS RATE BY 50 BASIS POINTS: WHAT TO KNOW

The Federal Funds target rate now sits between 4.75%-5.00%, and projections from the central bank show rates could fall below 4%.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 42063.36 +38.17 +0.09%
SP500 S&P 500 5702.55 -11.09 -0.19%

Investors celebrated the move, pushing stocks, which were already at record levels, even higher. The Dow Jones Industrial Average crossed 42,000 for the first time ever, while the S&P 500 hovers at its all-time high. 

HOW THE FED’S HISTORIC RATE CUT MAY IMPACT YOUR DAILY FINANCES

Dow Jones Industrial Average

The last time policymakers cut rates, the COVID-19 pandemic was raging as a public health and financial crisis, prompting an emergency rate cut in March 2020 when the Fed took rates to a range of 1%-1.25%, the largest cut since the 2008 financial crisis.

“The spread of the coronavirus has brought new challenges and risks,” Fed Chairman Jerome Powell said at the time during a news conference. “The virus has afflicted many communities around the world, and the outbreak has also disrupted economic activity in many countries. The virus and the measures being taken to contain it will surely weigh on economic activity, both here and abroad, for some time.”

Jerome Powell

Jerome Powell, chairman of the Federal Reserve, during a news conference following a Federal Open Market Committee meeting in Washington, D.C., July 31, 2024. (Al Drago/Bloomberg via Getty Images / Getty Images)

Americans enjoyed the lowest borrowing costs of a generation. For example, a 30-year fixed rate mortgage fell to a record low of 2.65% in January 2021, as tracked by Freddie Mac. 

HOW LOW MAY MORTGAGE RATES GO?

new homes being build in Sacramento, California

Homes under construction in Sacramento, Calif., July 3, 2023. (David Paul Morris/Bloomberg via Getty Images / Getty Images)

While the start of the current easing cycle is underway, the current conditions are far from the pandemic upheaval. Still, borrowing costs will begin to fall, but its unlikely rates will return to the lows of four years ago. 

FED GOVERNOR EXPLAINS HER NO VOTE

Additionally, inflation remains a risk. That’s why Federal Reserve Governor Michelle Bowman was the sole dissent, voting against a rate cut. 

“While core inflation remains around or above 2.5%, I see the risk that the committee’s larger policy action could be interpreted as a premature declaration of victory on our price stability mandate. We have not yet achieved our inflation goal” she explained Friday.



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Consumers may face higher beef prices from businesses

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Consumers may face higher beef prices from businesses


High beef prices have been weighing on U.S. businesses and consumers.

They have forced some businesses to make tough decisions about how to handle the increased costs, and some are passing the costs on to customers. 

Rob Passio, the owner of Lombardi’s Prime Meats in Philadelphia, told FOX Business correspondent Jeff Flock on “Varney & Co” that “there’s only so much you can absorb as far as the hit to your bottom line before you say to yourself you have to raise these prices.” 

The butcher shop, Passio said, hasn’t seen its customers balk at higher prices “because they see it.” 

EGGS ARE NOT THE ONLY EXPENSIVE FOOD: BEEF PRICES ARE ALSO ON THE RISE

ground beef

Organic ground beef Oct. 30, 2020, in Bavaria, Nuremberg (Daniel Karmann/picture alliance via Getty Images / Getty Images)

“They see the inflation. They see the pricing. You know, everything is up,” he told Flock.

Bureau of Labor Statistics inflation data measured by the consumer price index (CPI) showed prices for beef and veal were up 2.4% month-over-month and 7.6% year-over-year in February. 

The overall CPI posted a 0.2% increase month-over-month and a 2.8% jump year-over-year.

Courtney Schmidt, sector manager at Wells Fargo Agri-Food Institute, told FOX Business last month that high beef prices were driven by tighter U.S. beef production with consistent consumer demand.

The U.S. cattle herd is experiencing a down cycle, with cattle inventories at historically low levels in 2025, according to Schmidt.

Beef is more expensive

Demand for beef has remained strong since the pandemic, according to the American Farm Bureau Federation. (Kennedy Hayes/Fox News  / Fox News)

The U.S. Department of Agriculture (USDA) reported in late January that U.S. farms had 86.7 million head of cattle and calves. The count for beef cows specifically was 27.9 million, a decline of 1% compared to the same time last year, according to the USDA.

“I know they’re killing smaller cattle, so they’re trying, I guess, to kill them faster to create the supply that demand is needing,” Passio said. 

Some big companies source beef from Canada and Mexico, Flock reported on “Varney & Co.”

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President Donald Trump imposed 25% import tariffs on goods entering the U.S. from those two countries March 4 and, more recently, introduced exemptions for Mexico and Canada on goods under the United States-Mexico-Canada Agreement until early April.

Such a levy on imported beef would “increase the price,” according to Passio, adding that consumers “are going to pay for it.”

“My philosophy is to sell it as low as you can to show a savings, a value to the customer. And hopefully you have more customers to generate your revenue,” the Lombardi Prime Meats owner told Flock.  

beef in supermarket

Packages of beef are displayed for sale at a supermarket Jan. 12, 2023, in Foster City, Calif. (Liu Guanguan/China News Service/VCG via Getty Images / Getty Images)

In the U.S., ground beef averaged $5.63 per pound in February, while the per-pound price of boneless sirloin steak came in at $11.90, according to data from the Federal Reserve Bank of St. Louis. Those average prices were 9.6% and 1.6% higher, respectively, than the same month in 2024.

EGG PRICE SPIKE: WE ARE ‘PAST THE TOUGH PART,’ AGRICULTURE SECRETARY ROLLINS SAYS

The USDA projected in a report released this month that U.S. beef production is poised to amount to 26.685 billion pounds this year. 

Daniella Genovese contributed to this report.



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Is a Florida condo crisis brewing? Real estate developers claim rising costs are necessary

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Is a Florida condo crisis brewing? Real estate developers claim rising costs are necessary


High-rise condominium owners along the sunny and serene Florida coastlines are facing a costly reality, but prominent developers in the state argue surges in HOA fees and maintenance reserves are necessary to prevent a future tragedy.

“A lot of people have seen their maintenances double. They’ve seen some of the assessments become extremely unaffordable. It’s definitely impacted many residents here in Florida,” Gutman Development Marketing President Phil Gutman told Fox News Digital.

“There is a conflict, and the conflict is a bit complicated, and it’s a bit complex because you have three competing issues. One, you have the issue of safety. Two, you have older buildings,” Ian Bruce Eichner, The Continuum Company founder, also told Digital. “The last issue that comes from [the Condo 3.0 law] is a requirement that unless the condominium’s declaration, what the original offering said 50 years ago provides otherwise, you need 90% of the residents to agree to terminate the condominium.”

“We have the state, cities, city officials, code enforcement, city managers more involved in buildings. I think it’s important to prevent the next disaster, God forbid, the next catastrophe. Let’s not forget that there [are] thousands of old buildings, and thank God we didn’t see any other catastrophe except the Surfside building,” BH Group CEO and founder Isaac Toledano added.

IS ELON MUSK WARMING UP TO A SOUTH FLORIDA MOVE? REAL ESTATE INSIDERS SAY ‘REASONS ARE ENDLESS’

“I think the fact that you have more inspections, more regulations, I think it’s good for everybody and for everybody’s safety.”

High rise condos on Sunny Isles, Florida

Three prominent Florida real estate developers voice support for the state’s Condo 3.0 bill, even though it’s resulted in higher HOA and maintenance fees for unit owners. (Getty Images)

The higher condo fees are a result of the state’s “Condo 3.0” bill, passed by Florida Gov. Ron DeSantis in early 2024, less than three years after the Champlain Towers collapse in Surfside. The new bill dictates a new set of reforms, including how a building is maintained to how condo associations are governed. The oldest buildings and their residents are likely to see the most costly impending assessments.

“Any rational person has to be supportive of the legislation because it goes to the issue of safety. So while it may have a financial burden, we have an obligation – the state, the city, everybody has an obligation to keep people safe,” Eichner said. “So there’s no question that the law is something that, unfortunately, was a consequence of an event, but certainly it’s something everyone supports.”

According to recent data from Redfin, multiple Florida cities on the east and west coasts have year-over-year double-digit increases on condo fees. Tampa saw the sharpest rise at 16.7%; Fort Lauderdale had a 16.2% increase; the average median condo cost in Miami is $835 per month; and Key West has the highest median HOA fee at $1,063.

In some high-demand markets like Miami, unit owners at the 16-year-old 1060 Brickell Avenue building are required to split $21 million in special assessments after the board of directors reportedly identified areas of damage.

Many condo buildings that are 40 to 60 years old are more likely to be demolished and rebuilt as newer, luxury real estate projects, according to the developers.

“I think we’re going to see more and more of this transaction of prime real estate, older product getting replaced with the new product,” Toledano noted.

C.E.O. SAYS TRUMP WIN BRINGS NEWFOUND OPTIMISM TO U.S. REAL ESTATE: ‘MOMENTUM IS ABOUT TO CHANGE BIG TIME’

“The shift that we see in the market is the appetite of older product, older units, many other owners willing to work with the developers, and they understand that if you live in a three-story building that was built in the 1960s, this building will probably have some serious assessments, a lot of improvements, and sometimes it doesn’t make any sense to go and replace the roof, the electrical, the mechanical, something that will cost millions of dollars,” the BH Group lead also said. “[You’re] better off [to] sell the unit.”

“Some of these buildings that are 50, 60 years old that really can’t be fixed anymore. Those buildings do need to come down,” Gutman explained. “If somebody has an apartment there that was worth $300,000 in the open market, and we come in at $750 [to] $800,000, I believe those people are in a much better position than they were, to be quite honest with you. But people will have to find possibly another area to live in, something that’s more affordable, something that’s newer, something that’s safer.”

While state lawmakers argue the Condo 3.0 law will improve the longevity and quality of high-rise buildings, there are fears that luxury mixed-use developers strip residents of deciding powers, add costly fees and price them out of their long-term homes – especially for retired or fixed-income owners.

Gov. DeSantis’ office did not respond to Fox News Digital’s request for comment.

Eichner posed an example: “You have a building that is 62 years old, has $12 million in deferred maintenance, has a population of 20 or 25% of the building that’s retired, and that 20 or 25% either doesn’t want to move, doesn’t have the resources to move, need help to move.”

“So what you have is building after building facing assessments that they really can’t afford. They do not have the will, i.e. the 90% that can require a termination, and so they sit now in this ‘Never-Never Land’ in which they attempt to have some partial assessment, deferred assessment. Where is this going to go? I don’t know,” Eichner continued. “But for sure, there are hundreds of buildings that are in this situation as we wind our way out of year one of the post-assessment requirement. I suspect that this is going to be a real issue in 2025, 2026.”

In February, new leaders in the Florida legislature said their next sessions will include potential changes to condo laws, but will not involve talks around direct financial assistance for condo owners.

The three developers insist they’re here to help those concerned residents.

“I think that after all, developer or not, we’re all human being[s]. And if the stronger person can help the weaker person, or the smarter person can help the person with less knowledge or less experience, I think this is something that it’s good to see, and we should all help each other if we can,” Toledano said.

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“We don’t go in to try to take over buildings and don’t prefer a hostile environment. When we approach a building, we approach it and we move forward because everybody in the building wants to sell. And they don’t want the assessments, they don’t want the hiked-up maintenance fees,” Gutman chimed in. “That’s just our approach. We’re not fighters, we’re trying to help.”

“Part of the offer that we made was, to the extent that you are interested, we will help move you. To the extent that you’re not sure where you want to go, we will recommend some brokers to work with you,” Eichner said. “So it’s an attempt to have a more holistic, full-service approach rather than simply say: We’re offering you ‘x’ million dollars for your apartment, and that’s that, thank you, goodbye.”

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