The Fed Cut Rates

The Fed just cut rates. Does that mean that mortgage rates are lower too?”

Not necessarily. The Federal Reserve directly influences short term rates like credit cards, home equity lines of credit, and some adjustable-rate loans,

Mortgage rates are tied to Longer term rates such as the 10-30 year Treasuries. These rates are determined more by market forces, such as:

     📈 Inflation expectations

     🛍️ Economic growth outlook

     💲 Investor demand for US Treasuries

While the Fed doesn’t directly set long-term rates, its policies can indirectly affect them. For example, when the Fed cuts short-term rates, it often signals economic uncertainty, which may lead investors to seeking safer assets like Treasury bonds, lowering yields and potentially reducing long-term borrowing costs like mortgage rates.

The effect isn’t always immediate. Mortgage rates are forward-looking, meaning lenders adjust them based on expectations for future economic conditions rather than just current Fed actions.

In summary, a Fed rate cut can indirectly lower mortgage rates However, mortgage rates also depend on broader market dynamics.

Thanks for watching. My name is Pauline Lee. I’m a licensed realtor and loan officer. Connect with me for more mortgage and home buying tips. I encourage to get pre-approved.

Pauline Lee, Licensed MLO nmls# 674113

IND Mortgage LLC, #mortgagebroker licenses MA MB1785067, NH 25686-MBR, RI 20223376LB, FL MBR5005

pauline@indmortgage.com | (617) 965-1988 x205 | https://www.indmortgage.com/fed-cut-rates