Well, it’s Fed Day again. That means we’re going to get another decision from the Federal Reserve today.
At last glance, the odds of another 25-basis point cut are an overwhelming 97.8%, per the latest numbers from CME FedWatch.
In other words, the Fed will announce a 25-bp cut in a couple hours. Nobody will be surprised.
And chances are, if the last several Fed meetings have been any indication, mortgage rates will go up.
Why? Because they tend to defy the Fed, at least on the day. Allow me to explain.
The Fed Telegraphs Its Moves and Mortgage Rates React Long Before the Actual Meeting
The easiest explanation for why the Fed does one thing and mortgage rates do another comes down to the transparent nature of the Fed.
They don’t keep us all on pins and needles, wondering what they’ll do. We aren’t all holding our collective breath here.
On the contrary. We basically know what the Fed is going to do today. In fact, we’ve essentially known for a month if not longer what they are going to do today.
As such, the move is baked in. It’s already factored into the 30-year fixed mortgage rate that you see advertised.
Granted, the Fed doesn’t set mortgage rates, nor necessarily have as much influence as many think.
But Fed rate expectations can play a hand in things. Of course, the Fed is only making rate decisions based on the underlying economic data.
So it’s really economic data that determines mortgage rates, not the Fed or anybody else.
The only thing the Fed directly impacts is HELOC rates, which are tied to the prime rate that moves in lockstep with the fed funds rate.
Long story short, the 30-year fixed will not drop by 0.25% today, that is a fact.
But HELOCs will become 0.25% cheaper!
Mortgage Rates Could Go Up Today
We know mortgage rates aren’t going to drop because the Fed is cutting today.
They certainly aren’t dropping by 25 basis points. So no, your 6.125% rate isn’t falling to 5.875% today. Or anywhere near it.
If you’re thinking about floating your mortgage rate, be careful.
In fact, mortgage rates could well pop higher today after the highly anticipated FOMC statement is released.
But not because of the Fed rate cut. Because the market might just take a breath. It might unwind some of the downward movement leading into the cut.
Remember, mortgage rates are currently hovering near 3-year lows. When they’re at the low end of a range, the odds of a pullback are higher.
Similar to stocks at highs, a reversal is a real possibility.
Mortgage lenders and MBS investors might pump the brakes and say this is as good as it gets for now.
However, that will be determined to some degree by what the Fed says today.
Aside from the 25-bp cut, which is a sure thing, we get to hear from Fed Chair Jerome Powell again.
That’ll be what moves mortgage rates today, assuming they move at all.
I would err on the side of caution here as he probably will too.
He’ll likely say they’re still carefully cutting and without new data due to the government shutdown, their approach will continue to be conservative.
Mortgage rates may or may not like that, or not care at all, but chances are, given recent history, they’ll move in the opposite direction of the Fed.
But any such movement will likely be pretty minimal, and likely short-lived in the grand scheme of things.
Mortgage Rates vs. Fed Rate Decisions
October 29th, 2025: Rate cut, mortgage rates ???
September 17th, 2025: Rate cut, mortgage rates up
December 18, 2024: Rate cut, mortgage rates up
November 7th, 2024: Rate cut, mortgage rates DOWN
September 18th, 2024: Rate cut, mortgage rates up
July 26th, 2023: Rate hike, mortgage rates down
May 3rd, 2023: Rate hike, mortgage rates down
March 22nd, 2023: Rate hike, mortgage rates down
February 1st, 2023: Rate hike, mortgage rates down
December 14th, 2022: Rate hike, mortgage rates down
November 2nd, 2022: Rate hike, mortgage rates UP
September 21st, 2022: Rate hike, mortgage rates down
July 27th, 2022: Rate hike, mortgage rates down
June 15th, 2022: Rate hike, mortgage rates down
May 4th, 2022: Rate hike, mortgage rates down
March 16th, 2022: Rate hike, mortgage rates UP
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.
