BUSINESS + ECONOMY

Interest rates predicted to drop next year, what do experts have to say?

Dec 8, 2023, 5:00 PM

for sale sign in front of house, Interest rates expected to drop...

A sign noting a pending sale is shown in front of a home on Sunday, Aug. 20, 2023, in Concord, Mass. On Tuesday, Aug. 22, 2023. Predictions of interest rates dropping are exciting for hopeful homebuyers, but are they actually going to happen? (AP Photo/Peter Morgan)
Credit: ASSOCIATED PRESS)

(AP Photo/Peter Morgan)

SALT LAKE CITY — Predictions of interest rates dropping are exciting for hopeful homebuyers, but are they actually going to happen?

Sources like ING Group and Markets Insider have speculated that interest rates will drop as many as six times next year. However, Senior Economist for Zion’s Bank Robert Spendlove said, right now, that’s all they are– predictions. 

“I do think we are being premature to expect that rates will go down significantly next year,” he said. “The only scenario in which the Fed would be able to cut rates six times would be that the economy is deteriorating pretty dramatically.”

Spendlove said a large drop in rates would drive home prices and inflation up. The government is trying to this stop right now. The economy would have to take a big turn for the Fed to want to slash rates in a significant way.

Homebuyers should proceed with caution if they are basing financial decisions on the predictions, Spendlove said.

Right now, it’s very hard to know what rates will do. If the economy remains strong, it is most likely the rates will follow the same trend.

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Interest rates predicted to drop next year, what do experts have to say?