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The trade winds shifted this morning as the U.S. and Japan announced a tariff deal trimming duties on autos and other goods. The headlines sound optimistic—tariffs on Japanese cars drop from 27.5% to 15%—but don’t get too excited just yet. That 15% “baseline” is still far higher than pre-trade-war levels, which means the pressure on prices isn’t going away anytime soon.
And that brings us straight to the Fed.
Why the Fed Probably Won’t Cut Next Week
Despite political noise (and even some pressure from the White House), the Federal Reserve is almost certainly going to hold rates steady at next week’s July 29–30 meeting. Inflation—especially “sticky” goods inflation tied to tariffs—is still running too warm for Powell & Co. to risk an early cut.
Core CPI ticked up 0.2% in June, and while that’s not runaway inflation, it’s enough to keep the Fed cautious. Tariffs act like a hidden tax, driving up consumer prices without necessarily boosting wages, which creates the kind of supply-side pressure the Fed dislikes.
Translation? Expect no rate cut next week. But keep an eye on September—if inflation cools after these deals settle in, the Fed might have room to ease then.
What This Means for Boston & Cape Cod Real Estate
Here’s where we can move beyond the headlines—because from a boots-on-the-ground perspective here in Greater Boston and on the Cape, we’re already seeing the ripple effects of higher rates:
- Inventories are creeping up. Homes that would have been snapped up in days a year ago are now sitting on the market longer, giving buyers more options.
- Savvy buyers are negotiating—and winning. We’re working with a swath of buyers who understand that this is their moment. They’re not overbidding; they’re strategically negotiating discounts and getting sellers to cover closing costs or make repairs that would’ve been unheard of during the frenzy of 2021–22.
In other words, while national news is focused on whether the Fed will cut in September, savvy local buyers aren’t waiting—they’re taking advantage of today’s higher-rate environment to secure deals they couldn’t have touched a year ago.
The Takeaway
Tariff deals might cool global trade tensions, but they’re unlikely to push the Fed into action next week. Rates will stay where they are—at least for now. But for buyers in Greater Boston and Cape Cod, that’s not bad news.
Higher rates mean less competition, more inventory, and leverage that buyers haven’t had in years. If you’ve been waiting for the market to slow down enough to negotiate, this is it.
