Posted 22 days ago

Federal Reserve lowers rate by 1/4% today

The Federal Reserve lower the fed funds rate by a 1/4% today. I think many people will think great that means mortgage rates will drop by 1/4% also. Sorry that is not the case. When the fed lowers rates it does not mean Mortgage rates drop at the same time. Mortgage rates are tied to the 10 year treasury bill rates which are influenced by the economy. When it looks like the economy is doing worse then the 10 year note rate drops and this in turn drops mortgage rates. When the economy is improving then the 10 year rate goes up and so does the mortgage rates. The big talk this spring was that the economy was certain to go into a recession soon so mortgage rates trended downward starting in Feb 2019. The rates hit a low in August and have held steady since that time.When the fed lowered rates today, the mortgage rates stayed the same and they most likely will hold steady until the end of the year. This will be the last drop of the fed funds rate in 2019 and it looks like the fed will watch the economy in 2020 to see if more drops are needed. 

fed funds rate down my 1/4%


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