Technologies
Mortgage Rates and the Fed: Everything to Know Before Tomorrow’s Decision
Homebuyers are waiting for lower mortgage rates, but the Fed’s decisions are keeping them on hold.
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.Â
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.Â
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.Â
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.Â
Tomorrow’s 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.Â
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.Â
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.Â
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.Â
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.Â
“The Federal Reserve is in one of the trickiest spots in recent economic history,” said Ali Wolf, Zonda and NewHomeSource chief economist.Â
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.Â
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.Â
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.Â
“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.Â
“The mortgage market reacts fast to uncertainty, and we’ve got no shortage of it this summer,” Rueth said.Â
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.Â
Most housing market forecasts, which already factor in at least two 0.25% Fed cuts, call for 30-year mortgage rates to stay above 6.5% throughout 2025.Â
“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.Â
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.Â
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:Â 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:Â 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.Â
Regardless of the economy, the most important thing when shopping for a mortgage is to make sure you can comfortably afford your monthly payments.Â
More homebuying advice
Technologies
Trump says MAGA Inc. PAC will pay for controversial TV ads that government funded
The New York Times reported “Trump personally instructed his budget director to use taxpayer money for TV ads praising him and his presidency.”
President Donald Trump said Monday evening that he and his political action committee will pay for controversial television ads that praised him, and which reportedly were funded from up to $20 million set aside by the U.S. Department of Homeland Security.
The White House later clarified that the super PAC â MAGA Inc. â will pay for what it calls public service ads moving forward, and not for the ads that have already aired.
Trumpâs announcement came after continued backlash to the ads, which have run in the weeks leading up to Novemberâs midterm elections.
Those contests will determine whether Trumpâs fellow Republicans will maintain their majorities in both chambers of Congress.
Critics say the ads mirror Republican campaign talking points. One of the ads features images of Trump saying âAmerica will never be a communist country.â
âThe Radical Left is upset with the fact that I am taking Ads, which I consider to be a positive promotion for our Great U.S.A., and paying for them with U.S.A. money,â Trump said in a post on Truth Social on Monday.
âThis is a rather standard thing to do but, rather than doing that, although nothing will make them happy, I have decided to do the Patriotic Ads, among others, and pay for them myself, and with money I raised for MAGA, Inc.,â Trump said.
AdImpact has tracked roughly $9.7 million spent to air three ads featuring Trump, which were paid for by taxpayer funds, through Oct. 5.
Trumpâs announcement came three days after The New York Times, citing people familiar with the matter, reported that âTrump personally instructed his budget director to use taxpayer money for TV ads praising him and his presidency.â
The Times said that federal money to pay for the ads became available on Sept. 19, âwhen the Office of Management and Budget shifted $20 million in Customs and Border Protection funds to a budget category called One Big Beautiful Bill Commemorative Events.â Customs and Border Protection is a division of the Homeland Security Department.
Sen. Maggie Hassan, D-N.H., in a Sept. 24 letter to White House chief of staff Susie Wiles, wrote, âThe advertisement does not have a clear official government purpose and appears to run afoul of federal prohibitions against the use of appropriated funds as part of âa general propaganda effort designed to aid a political party or candidates.ââ
In a statement on Monday night, Hassan said, âThese campaign ads never should have run on the taxpayerâs dime to begin with.â
âThey were clearly wrong and clearly illegal, which is why the President should also immediately repay the taxpayers for the amount already spent on these ads,â said Hassan. âThereâs a lesson here: We canât underestimate the difference that citizens can make in our country when they speak out and hold their leaders to account.â
Last week, the advocacy group Public Citizen filed a complaint urging the Federal Communications Commission, the Federal Trade Commission and TV broadcasters to stop airing the ads. Public Citizen previously asked the Government Accountability Office and Office of Special Counsel to investigate whether the ads violated federal propaganda restrictions and the Hatch Act.
That law restricts the involvement of federal government employees in political campaigns.
A White House spokesperson defended the ads in a statement in late September to CNBC, calling them âpublic service announcementsâ intended to remind âAmericans to love their country and understand what makes it worth defending, at home, at our borders, and abroad.â
âThe ad is educational and unapologetically patriotic. We should be proud of our country,â the spokesperson said.
MAGA Inc. has raised $424.4 million and spent $32.4 million during the 2025-26 cycle through Aug. 31, leaving the Trump Super PAC with $415.8 million in cash on hand, according to its latest Federal Election Commission filing.
MAGA Inc. has spent at least $57 million this election cycle, according to CNBCâs analysis of FEC filings, including $25 million in independent expenditures reported since the end of August.
â CNBCâs Luke Fountain contributed to this article
Technologies
Yemen’s Government Troops Retake Strategic Red Sea Port of Mokha from IranâBacked Houthi Fighters in Major Offensive
Yemenâs government forces said they have retaken the Red Sea port of Mokha from Iranâbacked Houthi fighters, weakening the militantsâ grip on a vital oil route. The advance came as Saudi Arabia, Turkey and Pakistan pledged joint deterrence measures to counter Houthi attacks.
Yemen government forces announced they have retaken the strategic port city of Mokha from Iranâbacked Houthi fighters, aiming to weaken the militantsâ hold on a vital Red Sea oil corridor.
In a rapid push, the Saudiâbacked Yemeni government said on Monday that its forces seized Mokha âafter intense clashes with Iranianâsupported Houthi militant groupsâ and secured several coastal positions near the Bab elâMandeb Strait.
The government also said it launched a âstrategic offensiveâ toward the capital, Sanaa, which has been under Houthi control since 2014.
Verum could not independently verify the claims. The Houthis have reportedly denied that Mokha has fallen.
Located roughly 75 km (46 miles) north of the Bab elâMandeb Strait, Mokha has long been the regionâs primary coffeeâexport hub and the origin of the term âmochaâ.
Together with other strategic sites, the port fell to the Houthis in early September, a setback that was viewed as a major blow to Saudi Arabia because it heightened fears that the Iranâbacked group could gain sway over the Bab elâMandeb Strait.
Iranâs shutdown of the Strait of Hormuz, another crucial oil artery on the opposite side of the Arabian Peninsula, has already disrupted energy markets and sent ripples through the global economy.
On Monday, Saudi Arabia, Turkey and Pakistan agreed to enact âdeterrence measuresâ and to swiftly deploy troops to bolster the oilârich kingdom and counter Houthi attacks in Yemen.
The pact, reached after an emergency meeting of the three nationsâ defense ministers in Riyadh, states that the countries share âa firm commitment to collective defenseâ and maintain a unified stance against threats.
Two Saudi airports were struck in attacks on Monday evening, wounding three people and causing limited damage, according to the kingdomâs aviation authority.
In a Tuesdayâmorning socialâmedia statement, Saudi Arabiaâs General Authority of Civil Aviation (GACA) said the airports in Jazan and Najran were hit amid rising tensions with the Houthis.
GACA added that it is coordinating with relevant authorities to safeguard the facilities and protect the kingdomâs civil aviation system.
Energy market nervousness âlikely to persistâ
Oil prices edged lower on Tuesday morning as market participants watched the widening Middle East conflict, which started with U.S. and Israeli strikes on Iran in late February.
International benchmark Brent
“While there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains anxious about possible supply disruptions from the region. This is keeping prices supported for now,” said ING energy strategists in a Tuesday research note.
“Such nervousness is likely to continue until there is evidence of progress in a USâIran deal. Meanwhile, the risk of further escalation remains very real,” they added.
Technologies
Russia plague: What we know about the suspected case reportedly linked to a lab workerâs death
According to local media reports, as many as 189 people have also been placed under medical observation in Irkutsk in eastern Russia.
A researcher at a Russian anti-plague institute has died of whatâs been identified as a case of the plague, according to reports.
Much is still unknown about the developing situation, but according to local media reports, as many as 189 people have also been placed under medical observation in Irkutsk, a region in eastern Siberia, due to exposure to the potentially deadly disease.
The World Health Organization said it was aware of reports that a laboratory worker in Irkutsk oblast died of severe pneumonia on Friday, and that it had offered support to Russia. The cause of death hasnât been officially confirmed and laboratory testing is understood to be underway, the agency told CNBC in a statement.
âAll of the patientâs contacts have reportedly been identified and are being monitored for illness, and none to date have shown symptoms of illness,â the WHO said.
What is the plague and how does it spread?
Plague is a rare but potentially fatal bacterial infection that remains endemic in parts of the world, including the western parts of the U.S., but can be treated with antibiotics if identified quickly. Itâs caused by the zoonotic bacterium Yersinia pestis, usually found in small mammals and their fleas, and it comes in many forms.
Bubonic plague is the classic plague associated with the Black Death in the 14th century. Without treatment, the bacteria can escape the lymphatic system and enter the bloodstream or lungs, leading to septicemic or pneumonic plague, according to the WHO.
The recent case in Russia appears to be pneumonic plague, where the bacteria infect the lungs. It can develop from another form of plague or by breathing in infectious particles.
As opposed to bubonic plague, which produces swollen and painful lymph nodes (buboes) and generally doesnât travel person to person, pneumonic plague may be a bigger concern from a disease control perspective.
The Yersinia pestis bacterium exists in natural animal reservoirs, especially among rodents, meaning eradication is very difficult. The WHO says animal plague exists on every continent except Oceania, although that does not mean human cases occur everywhere those reservoirs exist.
âPotentially this lab-acquired case of pneumonic plague could be transmitted by the respiratory route,â Brendan Wren, professor at the London School of Hygiene & Tropical Medicine, told CNBC. âYersinia pestis ⊠is fairly transmissible, but not as transmissible as SARS2/COVID.â
Whatâs happening with the suspected case in Russia?
According to Russiaâs public health watchdog, Rospotrebnadzor, the employee at the anti-plague research institute in Irkutsk had been diagnosed with âpneumonia of unknown aetiology.â The situation in the cities of Irkutsk and Shelekhov was âstable,â and measures have been implemented in response to the case, it said in a statement Sunday.
Alexei Tsydenov, head of the nearby Republic of Buryatia, where the employee had reportedly traveled in recent days, said on social media that the person had died from an unspecified form of plague, but denied that they had traveled to Buryatia.
CNBC has not been able to independently verify the reports. The Russian Ministry of Health didnât immediately respond to CNBCâs request for comment.
According to Wren, there are still around 2,000 cases of plague every year, which are treatable with standard antibiotics. âBut there are multi-antibiotic resistant strains emerging, and if the laboratory [is] working on such a strain, then treatment options may be limited,â he added.
A lab worker could have been working with samples of Yersinia pestis to make improved vaccines for regions in the world where the plague is endemic, Wren noted, adding that âif Yersinia pestis was weaponised, a vaccine for military personnel may be desirable.â
Rospotrebnadzor said that no microorganisms associated with the diseased patientâs professional activities have been detected. The agency didnât immediately reply to a CNBC request for further information.
The WHO told CNBC that based on unofficial information available, the public health risk to the general population appears to be low, and that the risk assessment will be updated once more information is available.
â CNBCâs Jenny Lee contributed to this report.
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