09/18/2025
The Fed cut interest rates by 0.25% today — their first cut this year. Many assume that means mortgage rates will drop too… but that’s usually not how it works.
📝 The Fed rate impacts short-term loans (like credit cards or HELOCs). Mortgage rates, however, move with the Bond Market — and the Bond Market reacts more to the Fed’s Dot Plot (future rate forecasts) and the Fed Chair’s press conference than the cut itself.
Today’s Dot Plot showed more Fed members leaning toward two more cuts in 2025, which gave bonds a quick boost. But during his press conference, Powell called this a “risk management” cut and emphasized that the Fed is deciding on rate cuts meeting by meeting based on incoming data.
🎢 Result: rates spiked back up. By this afternoon, mortgage rates were actually higher than yesterday — despite the cut.
👉 Takeaway: Fed cuts make headlines, but it’s the outlook and market reaction that really drive mortgage rates.
✨ Thinking of buying or refinancing? Let’s talk about what today’s moves mean for your mortgage options.
