Technologies

How the Federal Reserve Actually Affects Mortgage Rates

Experts predict the Fed won’t start cutting rates until the fall at the earliest. That means we’re not likely to see mortgage rates drop below 6.5% for a while.

If you tracked the Federal Reserve’s monetary policy decisions last year, you might have been puzzled: The Fed’s three interest rate cuts didn’t bring about lower mortgage rates. In fact, the average rate for a 30-year fixed home loan has hovered around 6.8% for the past several months.

The Fed’s interest rate decisions don’t have a direct or immediate effect on home loan rates. Often, what the central bank says about its future plans can move the market more than its actual rate changes.

On Wednesday, the Fed is expected to hold off on cutting interest rates for the fifth time this year. While mortgage rates might see some ups and downs, many economists think they’ll stay pretty much the same — between 6.5% and 7% — until the economic outlook is clearer.

«Prospective homebuyers should know markets are forward-looking, and changes in mortgage rates can happen well in advance if markets can anticipate it,» said Kara Ng, senior economist at Zillow. «While a July cut is unlikely, markets are closely watching for signals about a possible September reduction,» Ng said.

All eyes will be on Fed Chair Jerome Powell’s post-meeting remarks. If Powell signals concerns about lingering inflation or the chance of fewer cuts, bond yields and mortgage rates are likely to climb. If he expresses optimism about inflation being under control and hints at ongoing policy easing, mortgage rates could dip.

Here’s what you need to know about how the government’s interest rate policy influences your home loan.

What is the Federal Reserve’s relationship to mortgage rates?

The Fed sets and oversees US monetary policy under a dual mandate to maintain price stability and maximum employment. It does this largely by adjusting the federal funds rate, the rate at which banks borrow and lend their money.

When the economy weakens and unemployment rises, the Fed lowers interest rates to encourage spending and propel growth, as it did during the COVID-19 pandemic.

It does the opposite when inflation is high. For example, the Fed raised its benchmark interest rate by more than five percentage points between early 2022 and mid-2023, to slow price growth by curbing consumer borrowing and spending.

Changes in the cost of borrowing set off a slow chain reaction that eventually affects mortgage rates and the housing market, as banks pass along the Fed’s rate hikes or cuts to consumers through longer-term loans, including home loans.

Yet, because mortgage rates respond to several economic factors, it’s not uncommon for the federal funds rate and mortgage rates to move in different directions for some time.

Why is the Fed postponing interest rate cuts?

After making three interest rate cuts in 2024, the Fed has been in a holding pattern throughout 2025. President Trump’s unpredictable tariff campaign, immigration policies and federal cutbacks threaten to drive up prices and drag on growth.

Despite the president’s repeated calls for policymakers to cut borrowing rates immediately, economists say the central bank has good reason to pause.

«Cutting rates prematurely — especially in response to political pressure — could undermine its commitment to controlling inflation,» said Ng. » Ironically, this could cause mortgage rates to rise, not fall, counteracting the intended stimulus.»

Lowering interest rates could allow inflation to surge, which is bad for mortgage rates. Keeping rates high, however, increases the risk of a job-loss recession that would cause widespread financial hardship.

Recent data show inflation making slow but steady progress toward the Fed’s annual target rate of 2%, but price growth is expected to tick back up in the coming months as companies pass on the cost of tariffs onto consumers.

What is the forecast for Fed cuts and mortgage rates in 2025?

While experts now predict an interest rate cut in the fall, Fed Chair Powell remains noncommittal on any specific timeframe.

Inflation could prompt the central bank to forgo one (or both) of its projected rate cuts, which would keep mortgage rates high.

On the flip side, if unemployment spikes — a real possibility given the slowdown in hiring and the uptick in layoffs — the Fed could be forced to implement interest rate cuts. In that case, mortgage rates should gradually ease, though not dramatically.

Most housing market forecasts, which already factor in at least two 0.25% Fed cuts, call for 30-year mortgage rates to stay above 6% throughout 2025.

What factors affect mortgage rates?

Mortgage rates move around for many of the same reasons home prices do: supply, demand, inflation and even the employment rate.

Personal factors, such as a homebuyer’s credit score, down payment and home loan amount, also determine one’s individual mortgage rate. Different loan types and terms also have varying interest rates.

Policy changes: When the Fed adjusts the federal funds rate, it affects many aspects of the economy, including mortgage rates. The federal funds rate affects how much it costs banks to borrow money, which in turn affects what banks charge consumers to make a profit.

Inflation: Generally, when inflation is high, mortgage rates tend to be high. Because inflation chips away at purchasing power, lenders set higher interest rates on loans to make up for that loss and ensure a profit.

Supply and demand: When demand for mortgages is high, lenders tend to raise interest rates. This is because they have only so much capital to lend in the form of home loans. Conversely, when demand for mortgages is low, lenders tend to slash interest rates to attract borrowers.

Bond market activity: Mortgage lenders peg fixed interest rates, like fixed-rate mortgages, to bond rates. Mortgage bonds, also called mortgage-backed securities, are bundles of mortgages sold to investors and are closely tied to the 10-year Treasury. When bond interest rates are high, the bond has less value on the market where investors buy and sell securities, causing mortgage interest rates to go up.

Other key indicators: Employment patterns and other aspects of the economy that affect investor confidence and consumer spending and borrowing also influence mortgage rates. For instance, a strong jobs report and a robust economy could indicate greater demand for housing, which can put upward pressure on mortgage rates. When the economy slows and unemployment is high, mortgage rates tend to be lower.

Read more: Fact Check: Trump Doesn’t Have the Power to Force Lower Interest Rates

Is now a good time to get a mortgage?

Even though timing is everything in the mortgage market, you can’t control what the Fed does. «Forecasting interest rates is nearly impossible in today’s market,» said Ali Wolf, Zonda and NewHomeSource chief economist.

Regardless of the economy, the most important thing when shopping for a mortgage is to make sure you can comfortably afford your monthly payments.

More homebuying advice

Technologies

Apple Reportedly Eyes ‘iPhone Ultra’ Name for Folding Phone Expected This Year

It’s another week and another bunch of rumors about the company’s first foldable phone.

It’s a new week and a new set of rumors for Apple’s first foldable phone. If Tuesday’s reports are true, the device will be called the Ultra, have a bookish shape and launch in September.

The main report comes from Bloomberg’s Mark Gurman, who said the foldable is on track for a September launch, despite Nikkei Asia reporting that the phone might not launch until 2027 due to issues that cropped up during the engineering test phase.

Citing unnamed sources, Gurman said Apple will introduce the foldable phone in September alongside the iPhone 18 Pro and Pro Max. Those phones would likely go on sale about a week after being unveiled.

An Apple representative didn’t immediately respond to a request for comment. It’s important to note that while rumors abound, Apple has confirmed none of them — not even the existence of a foldable iPhone.

Still, the earlier Nikkei Asia report was jarring enough to send Apple’s stock down 5.1% before it rebounded later, Gurman noted. The Nikkei Asia story said unexpected issues had arisen during engineering testing and that more time was needed to make «necessary adjustments.» Under a worst-case scenario, the first shipment of the foldables would not occur until 2027, the report said.

Looks like a book

Meanwhile, consumer tech reviewer Sonny Dickson posted images on X showing dummy models indicating how big the iPhone Fold, iPhone 18 Pro and iPhone 18 Pro Max might be. In the image, the foldable has an almost square shape when fully opened.

Dummy images are useful for phone accessory manufacturers — such as case-makers — so they can get a head start on mass production before the devices are launched. When phones are released, consumers are quick to order cases and other accessories, so the sizes need to be known. It is unclear whether the dummy models shown are actual mockups from Apple.

People who commented on X didn’t seem to love the dummy images, particularly because the models shown appear to lack MagSafe, Apple’s magnetic system on the back of the phone that lets chargers and other accessories snap on.

Stefan Moser wrote, «If the Fold is missing MagSafe, this will be a big NO for me.»

There were other criticisms, too.

An X user going by DasnkiCS posted that the phone looks «too wide, can’t palm that easily in normal phone use.»

And another X user, Brosnan Hoban, wrote, «Fold looks like a credit card from 2050.»

What’s in a name?

Tuesday’s other big rumor concerned the foldable’s name.

A leaker, Digital Chat Station, posted on the Chinese social site Weibo that the foldable iPhone could be called the iPhone Ultra. The post also said Chinese competitors may use the Ultra name for their own foldables to compete directly with Apple on design, specs, and price.

The predominant rumored name has been the iPhone Fold, but others have included Flip, Duo and iFold.

In March, Gurman wrote in his Power On newsletter that Apple was considering a full line of Ultra products, possibly including a foldable phone, an M6 MacBook Pro with OLED, a foldable iPad and high-end Macs. Gurman also said Apple might introduce AirPods with «computer-vision cameras» to send visual data to Siri for its AI assistant feature.

We’ve seen a steady stream of tidbits about the foldable recently. There could be a large inner screen for multitasking, and people could open apps side by side. There might also be two rear cameras, a front-facing camera and a Touch ID side button.

Whatever Apple finally comes up with, it will be playing catch-up. Other major phone-makers already have foldable phones on the market, including the Samsung Galaxy Z Fold 7, the Google Pixel 10 Pro Fold, the OnePlus Open, the Huawei Mate XT, the Honor Magic V5 and the Motorola Razr Ultra.

Technologies

Artemis II Astronauts Name Moon Crater After Commander Reid Wiseman’s Late Wife

The emotional moment was streamed by NASA moments after the crew made history.

On Monday, after the crew aboard Artemis II made a historic feat by breaking Apollo 13’s distance record, they made the moment even more special by proposing to name one of the craters on the moon «Carroll,» in memory of Commander Reid Wiseman’s late wife.

While contacting Mission Control, Mission Specialist and astronaut Jeremy Hansen stated that the «close-knit astronaut family» previously lost a loved one who was «the spouse of Reid, the mother of Katie and Ellie.»

«It’s a bright spot on the moon,» Hansen said while describing the crater during the emotional call. «And we would like to call it Carroll.»

After the request, you can see Wiseman embrace Hansen before the rest of the crew joins in for a group hug.

Carroll Wiseman died in 2020 at 46 years old from cancer. Wiseman’s NASA bio page states that Carroll «dedicated her life to helping others as a newborn intensive care unit Registered Nurse.»

Before the Artemis II mission, Wiseman posted a selfie with his two daughters on X with a caption that reads in part, «I love these two ladies, and I’m boarding that rocket a very proud father.»

Follow CNET’s coverage of the 10-day Artemis II mission as the Orion makes its way back to Earth.

Technologies

Artemis II Astronauts Are Using iPhones to Capture Stunning Space Images

After smartphones were cleared by NASA for space missions, the crew members of the Integrity spacecraft are beaming back lots of iPhone photos.

The four astronauts aboard the Integrity spacecraft now headed home from their historic arc around the moon really are like the rest of us: Sometimes they reach for their smartphones to snap photos.

For the Artemis II mission, iPhone 17 Pro Max phones have been used to capture photos inside the capsule of the astronauts pondering the views of Earth and working on mission objectives. (Technically, NASA refers to them as PCDs – personal computing devices.)

Smartphones were cleared for use in space for the first time in February. In a post on X, NASA Administrator Jared Isaacman wrote, «We are giving our crews the tools to capture special moments for their families and share inspiring images and video with the world.»

Early in the mission, Commander Reid Wiseman snapped a pair of photos looking out the window with Earth behind him. Mission specialist Christina Koch and her dynamic curls in zero-gravity also captured a pensive view looking out over the planet. All three were made using the front camera — because wouldn’t you want to grab a selfie if you were in space?

The iPhone 17 Pro’s rear cameras are pulling their own weight during the mission, too. During the live broadcast as the crew approached the moon, Wiseman took a photo of the moon’s surface using the iPhone’s telephoto camera at 8x zoom. He turned the screen toward one of the video cameras mounted inside the spacecraft, creating an image of the moon’s surface alone against the darkness of the unlit cabin, with the iPhone’s signature rounded edges and Dynamic Island cutout at the top.

The main photo workhorses on this trip are a Nikon D5 DSLR and a Nikon Z9. The D5 is a model that has been used on several space excursions, and the Z9 is onboard as an experimental camera.

For NASA missions, every piece of equipment must be tested and certified, which is why the previously-approved D5 has a secure spot. Cameras must be resistent to space environmental factors like radiation, and safe if they’re floating around the capsule. However, the iPhones in space now are off-the-shelf models, according to a report by Jackie Watties of CNN.

The moon flyby was especially photo-intensive, with astronauts switching places several times so that two were always at windows with cameras and relating what they could see with their eyes. This photo of mission specialist and Canadian Space Agency astronaut Jeremy Hansen taking images using one of the Nikon cameras shows how some windows have camera shrouds attached. The shroud ensures that light from the interior isn’t reflected in the glass.

In a particularly relatable photo, Hansen is also using the front-facing camera of a white iPhone 17 Pro — as a portable mirror while he shaves. As the (modified) saying goes, the best selfie screen is the one you have with you.

The iPhone 17 Pro isn’t the first Apple product to go into space. Crew members have taken iPods, iPads and AirPods on missions since the Space Shuttle era. The Mac Portable even went up on a shuttle (and revealed that its trackball in zero-G isn’t the best option).

An Apple representative didn’t immediately respond to a request for comment.