10/30/2025
A conversation I've had too often over the last few weeks...
Client: I think I'm going to see if we can get lower. The Fed is supposed to keep cutting rates.
Me: Historically, rates go up after the FED cuts the fed funds rate. They aren't the same thing.
Client: Well, I still want to see them go down a bit.
I understand the thought, we hear "RATES" and our mind immediately goes to mortgage rates. After all, who knows the actual interest rates of their credit cards?
The Federal Reserve does not control mortgage rates. That is determined by the value of Mortgage Backed Securities(MBS), which are impacted by a lot of factors, including:
- 10 Year Treasury Yield
- Stock Risk and Movements to Safety
- Government purchasing of MBS's
- Economic Data (PPI, CPI, Unemployment, Manufacturing, Jobs Creations, etc.)
Hopefully, we will see the mortgage market pull back an over response to the comments from Jerome Powell yesterday. The reality: the FED is ALWAYS "data dependent".
With the government shutdown, there is not as much data available to determine what the FED will do next. That puts the mortgage market in a holding pattern, while only having a few opportunities to change direction.
If you can benefit from a refinance now, go ahead and do it. Rates are not promised to go down. Savings now can take years off your mortgage or lower payments to help cover the increased cost of living.
For an honest review of your mortgage, I'm always available for a call or text at 910.217.2993 or [email protected]
