There is a common misunderstanding amongst the greater part of the American population that when the Fed cuts rates, mortgage rates decline. 99% of the time, it is actually the reverse. Mortgage rates that are not tied directly to an index (like Prime, LIBOR, MTA, etc) are tied to mortgage backed securities (MBS), better known as bonds. As I am sure you are aware, there is an inverse relationship (99% of the time) between stocks and bonds. When the Fed cuts rates, unless it is too little too late, it will send a signal to Wall Street that they can be confident of a bailout. As a result, the stock market should rise. When you see huge gains in the DOW it is because investors are unloading their positions in bonds to invest in stocks. As a result, mortgage backed securities get devalued and mortgage rates RISE. The inverse is also true. So, when the FED raises rates, almost assuredly, all of the 3/1, 5/1, 7/1, 10/1 ARMs and 15 and 30 year fixed rate mortgage rates will rise, not fall. When the FED lowers rates, you will see the Prime rate cut shortly thereafter. Prime is what most home equity lines of credit (HELOCs) are tied to, as well as builder construction lines. LIBOR will tend to track PRIME quickly, MTA will lag behind.
So, if someone is considering refinancing and they believe that the FED is going to cut rates again, the best advice for them to save money is to either lock their rate in a week or more BEFORE the FED cut (typically if a FED rate cut is foreshadowed the stock market already has it priced in by the time of the cut) or, to wait until several weeks after the FED rate cut to allow the bond market to correct and most rates to hopefully drop. Under very rare circumstances should someone lock their rate the day of the FED cut as it typically will result in them getting a higher rate than they could with proper planning. An easy way for your readers to understand what is happening with rates daily (as they are in constant flux every day the bond market is open) is to identify what the stock market is doing. Generally speaking, if stocks are up, mortgage rates are up and if stocks are down, mortgage rates are down. Obviously, we could continue this to discuss the impact of the inverted yield curve on the current rate environment but it would be a waste of time. Rates are still at historic lows and with proper planning, people still have an ability to take advantage of an incredible opportunity.