It can be exciting to hear that the Fed just cut rates, and leads people to think that mortgage rates just dropped as well.  But it isn’t quite so simple.  The Feds future moves are well anticipated and the market – meaning bond traders, economists, pundits, etc. all parse the Fed’s previous statements to determine the likelihood of a future rate cut.  And when the Fed cuts rates, and this cut was already anticipated, mortgage rates generally do not move at all, since this anticipated move was already baked in.

However, when the Fed makes a move that is different from what the market anticipates, that can roil the market and quickly move mortgage rates up or down.

Read more about this impact here.

What The Fed Rate Cut Means To You