Technologies

Mortgage Rates and the Fed: Everything to Know Before This Week’s Meeting

Don’t expect big changes to mortgage rates soon, as the Fed maintains its cautious approach.

On Wednesday, the Federal Reserve is expected to extend a pause on interest rate cuts for a fourth consecutive time this year. Though mortgage rates could see some volatility, many economists expect them to stay somewhat flat until the economic picture drastically changes.

Rates will stay in the 6.75% to 7.25% range unless the Fed signals multiple cuts soon and backs it up with data, said Nicole Rueth, of the Rueth Team with Movement Mortgage. «Homebuyers waiting on rates to drop drastically might be disappointed,» Rueth said.

The relationship between the central bank’s interest rate decisions and home loan rates isn’t direct or immediate. Case in point: The Fed’s three interest rate cuts in 2024 didn’t translate into cheaper mortgages. The average rate for a 30-year fixed home loan has hovered around 6.8% since late fall.

Often, what the central bank says about future plans can move the market more than its actual actions. Mortgage rates are driven by the bond market, investor expectations and a host of other economic factors.

«Mortgage rates move on expectations, not announcements,» said Rueth.

The focus will be on what Fed Chair Jerome Powell says following the meeting. Should Powell express concern over lingering inflation or a reduced number of rate cuts, bond yields and mortgage rates are expected to rise. If he conveys optimism about inflation and suggests further policy easing, mortgage rates may decline.

«It’s most often the case that longer-term interest rates begin to decline before the Fed cuts rates,» said Keith Gumbinger, vice president at HSH.com.

Here’s what you need to know about how the government’s interest rate policies influence the mortgage market.

What is the Fed’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 putting off interest rate cuts?

After making three interest rate cuts in 2024, the Fed is now in a holding pattern. With President Donald Trump’s unpredictable tariff campaign, immigration policies and federal cutbacks threatening to drive up prices and drag on growth, economists say the central bank has good reason to pause.

«The Federal Reserve is in one of the trickiest spots in recent economic history,» said Ali Wolf, Zonda and NewHomeSource chief economist.

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 given the uncertainty surrounding Trump’s economic agenda, the central bank isn’t in a hurry to lower borrowing rates.

What is the forecast for interest rate cuts in 2025?

Though Powell remains noncommittal on any specific time frame, experts now predict an interest rate cut in the fall.

«I’m eyeing September for the first rate cut, if inflation keeps cooling and the labor market weakens,» Rueth said.

However, tariffs are the big wildcard. Rueth said that if a trade war fuels inflation, rates could jump even without a Fed move. Political dysfunction, rising debt and global instability are also a recipe for rate volatility.

«The mortgage market reacts fast to uncertainty, and we’ve got no shortage of it this summer,» Rueth said.

On the flip side, if unemployment spikes — a real possibility given rising jobless claims — the Fed could be forced to implement interest rate cuts earlier than anticipated. 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.

«We might see rates settle into the low to mid-6% by year-end,» Rueth said. «But we’re not going back to 3%.»

What other 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 Wolf.

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

How Did ChatGPT Get ‘Absolutely Wrecked’ at Chess by an 1970s-Era Atari 2600?

The console Gen Xers used to play Pac-Man and Pitfall on apparently was better than anyone knew.

OpenAI’s ChatGPT has some major AI chatbot competitors in the market: Gemini, Copilot, Claude. Now add to that list the Atari 2600. The OG video game console, which was first released in 1977, was used in an engineer’s experiment to see how it would fare playing chess against the AI chatbot.

By using a software emulator to run Atari’s 1979 game Video Chess, Citrix engineer Robert Caruso said he was able to set up a match between ChatGPT and the 46-year-old game. The matchup did not go well for ChatGPT.

«ChatGPT confused rooks for bishops, missed pawn forks and repeatedly lost track of where pieces were — first blaming the Atari icons as too abstract, then faring no better even after switching to standard chess notations,» Caruso wrote in a LinkedIn post.

«It made enough blunders to get laughed out of a 3rd-grade chess club,» Caruso said. «ChatGPT got absolutely wrecked at the beginner level.»

Caruso wrote that the 90-minute match continued badly and that the AI chatbot repeatedly requested that the match start over.

For decades, the ability for computers to defeat humans at chess has been a measure of their power. In 1997, IBM made headlines when its Deep Blue technology defeated chess grandmaster Garry Kasparov in a series of matches.

Caruso’s experiment doesn’t mean ChatGPT is useless for chess, but because it’s more of a language model than a supercomputer, it’s less likely to serve that purpose well. A few years ago, a developer created a ChatGPT plugin called ChessGPT. But it may be better to discuss chess with OpenAI’s chatbot than to try to play against it.

A representative for OpenAI did not immediately return a request for comment.

(Disclosure: Ziff Davis, CNET’s parent company, in April filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.)

Technologies

Your 2018 iPhone XS Is Now a ‘Vintage’ Device: Here’s What That Means

The device will still get updates for the rest of the year, but Apple is otherwise ceasing support for the 2018 iPhone.

Things don’t last forever, and in the tech world, they rarely even last five years. Apple lists older products on what it calls the vintage list, which consists of products the company stopped selling five to seven years ago. And if you bought your iPhone in 2018, the iPhone XS, your phone is now officially vintage.

The iPhone XS launched in 2018 and was officially discontinued in 2020 once all of its stock ran out. The phone joins the iPhone 7 Plus, two iPhone 8 models, the iPhone XS Max, and the iPhone 6S Plus, all of which have been added to the list since the calendar flipped to 2025.

Now that it’s there, the iPhone XS, along with the other iPhones listed above, will spend the next two years as a vintage device on Apple’s roster. Once they hit the seven-year mark, these phones will be moved to the obsolete list. The most recent device to be rendered obsolete by Apple is the 5th-generation iPad.

You have a vintage phone, so what now?

The good news is that having a vintage phone doesn’t mean much in the immediate short term, but it will before the end of the year.

Apple products continue to have repair support for up to five years after they leave store shelves, but can still be repaired after the five-year mark, provided that there are still parts available. That means that the iPhone XS and the other models listed are no longer officially supported, but repair techs can still order parts as long as Apple has them.

Such parts are likely in abundance since the phone just entered the vintage list. However, over the next two years, it’ll become harder and harder for repair shops to find official parts for the iPhone XS. So, if your phone breaks next year, there is no guarantee that a repair shop will be able to find official parts to fix it.

In terms of software, it’s much the same story. Apple is still releasing iOS 18 updates and will continue to do so until iOS 26 comes out. After that, Apple tends to stop supporting the prior generation of iOS. Since the iPhone XS is not included on the list of iOS 26-compatible devices, software support will mostly end later this year once the new version comes out.

Apple did this last year as well, with the final iOS 17 update releasing on Nov. 19, 2024. Apple typically guarantees support for devices for up to five years, and since the iPhone XS came out in 2018, it has long since surpassed the mark.

Being put on the vintage list can be construed as a light warning from Apple that your phone will no longer be supported very soon. If you own an iPhone XS, you’ll have software support until November when iOS 26 launches, and you’ll have repair support as long as the parts hold out. You don’t need a new phone today, but it’s something you may want to look into sooner rather than later.

Technologies

iPhone 17 Rumors: New iPhone Battery Could Be Stronger and Smaller

Speculation on better battery life and charging could give a power boost to the rumored iPhone Air.

The next iteration of iPhones is just around the corner, with an official announcement expected sometime this fall. With the Worldwide Developers Conference now behind us, we’re most looking forward to the announcement of the iPhone 17.

There are plenty of rumors about what the next iPhone will look like and what sort of specs it may have. One of the more popular talking points for any new smartphone release is battery life, and the new iPhone is no exception. A rumored iPhone 17 Air with a thinner design has raised the question of whether a slimmer iPhone would have to sacrifice battery life.

Regardless of the model type, battery life is a concern across the board. After all, you can’t use your new tech if the battery drains too fast and doesn’t last more than a few hours. We’ve sorted through all the rumors and leaks when it comes to the battery for the iPhone 17. Let’s break it down.

Battery size for the next iPhone

Current iPhones utilize a lithium-ion battery, which is less malleable and not really conducive to being used in a slimmer model, like the rumored iPhone 17 Air. So, if they were to shrink the lithium-ion battery to fit a skinnier frame, it would likely have less capacity. However, Apple may be adding a silicon-anode battery to the new slimmer iPhone, according to AppleInsider.

Compared with graphite-based anodes, common in lithium-ion batteries, silicon anodes can hold more lithium ions, allowing them to store more energy. In theory, that would mean a more compact silicon-anode battery wouldn’t sacrifice power. The iPhone may even charge faster than previous iterations as a result. As for the rumored iPhone 17 Pro Max, according to 9to5mac, it’s expected to have a slightly larger battery than the iPhone 16 Max Pro.

AI-powered battery management

The next iPhones (and the current models after iOS 26 rolls out) will have AI-powered adaptive battery energy management starting this fall, we learned at WWDC. Part of Apple Intelligence, the company will utilize AI to monitor how you use your device and adjust performance and energy consumption settings accordingly, aiming to extend the phone’s battery life. Think of Adaptive Power as the first step toward extending your iPhone’s battery life and Low Power mode as the last step of doing the same.

Another piece of new hardware that’ll likely impact battery efficiency is the rumored A19 processing chip. The iPhone 17 base and Air will likely get the A18 chip, which is the same chip that the iPhone 16 uses. However, according to Apple analyst Jeff Pu, the rumored iPhone 17 Pro and iPhone 17 Pro Max are set to include the A19 chip, which would likely come equipped with better optimization, which in turn could impact how long the battery will last on the rumored iPhone, and how efficiently it will run.

How accurate are iPhone rumors?

Until Apple officially releases its new phone, speculation on the iPhone 17 is simply educated guesswork. While most rumors come from insider knowledge or are leaked from the teams working on these products, until Apple says otherwise, they remain rumors.