With the government shutdown limiting the quantity of economic data available to markets and policymakers, the central bank’s Federal Open Market Committee (FOMC) enacted a widely anticipated 25 basis point cut for the short-term federal funds rate. This marks the second consecutive cut this Fall, and the move decreases the policy rate to an upper rate of 4.0%. Reflecting that the market anticipated this policy move, long-term rates were relatively unchanged after the FOMC announcement. …With respect to housing supply, in contrast to movement for long-term rates, the reduction of the federal funds rate will have a direct, beneficial effect on interest rates for acquisition, development and construction (AD&C) loans, the key financing channel for private builders who build more than 60% of single-family homes. This will reduce lending costs for builders across the nation and enable more attainable supply.