Today, the Federal Reserve cut interest rates by 25 basis points, bringing the federal funds rate range to 4.25%–4.5%. This is not the same as mortgage rates, but it can influence broader economic trends and the cost of borrowing for credit cards, car loans, and business loans.
Here’s what you need to know:
Third rate cut in a row: While inflation remains a concern, the Fed prioritized supporting price stability and employment.
Inflation forecast raised: The Fed has updated its inflation prediction, now expecting 2.5% inflation by the end of next year, instead of the 2.1% forecasted in September.
Uncertainty ahead: The economy could change significantly depending on what President-elect Donald Trump and lawmakers decide on policies like tariffs and immigration.
Fed Chair Jerome Powell acknowledged the difficulty of today’s decision, stressing the need for flexibility as they continue to assess the economy.
What this means for you!
While mortgage rates don’t always follow the Fed’s moves directly, this cut could still impact trends. If you are on the fence about buying or refinancing, now might be the right time to take action before rates shift again.