01/30/2025
Hey everyone, big news from the Federal Reserve yesterday!
After cutting rates three times last year, the Fed has decided to pause rate cuts for now, leaving the federal funds rate at 4.25%–4.5%.
Now, while the federal funds rate isn’t the same as mortgage rates, it can influence them, along with rates on things like credit cards and car loans.
Here’s what Fed Chair, Jerome Powell, had to say about inflation: He mentioned that inflation has made progress, but prices are still higher than they’d like—just above their 2% target.
Political pressure is also a big factor. President Trump is pushing for even bigger rate cuts and considering new tariffs on countries like Mexico, Canada, and China.
Powell also said the Fed is going to be cautious and wait to see what happens with government policies before making any major decisions. They’re not moving forward with more cuts unless the job market stays strong and inflation comes under control.
So what does this mean for mortgage rates? While mortgage rates don’t always follow the Fed’s moves, any economic uncertainty can create rate swings. If you’ve been thinking about buying or refinancing, now could be a good time to act before things change.
