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

• Weekly Mortgage Predictions
• Forget Mortgage Rates. Americans Say They Can’t Even Save for a Down Payment
• Despite Lower Mortgage Rates, Another Refinancing Boom Isn’t Likely. Here’s Why
• You Might Be Eager to Buy a House, but Homeowners Are Holding Tight to Their Mortgages

I wasn’t exactly sold on the idea of having a «buddy» cheering me on during a workout when Apple first announced its Workout Buddy feature in WatchOS 26. The workout partner I had in mind was more of a no-nonsense trainer; someone to push me out of my comfort zone and into peak performance. Apple’s version, instead, is an AI-powered voice that dishes out praise as you run (or as you do any number of activities). But after testing it myself and talking in-depth with Apple about how it works, I’m starting to think the company undersold it on purpose. Workout Buddy is much more than just a hype man, and it represents a crucial turning point in Apple’s health journey. 

Workout Buddy turns your Apple Watch into a friendly voice that lauds your achievements during workouts. The WatchOS 26 feature isn’t a full-blown fitness coach that can guide your training plan, but that doesn’t mean Apple isn’t headed there. In fact, Workout Buddy may be the clearest signal yet that Apple is laying the groundwork for something much bigger in terms of fitness tools and AI. 

At a time when investors and enthusiasts are critical about the company’s AI efforts, especially compared to competitors like Samsung and Google, Apple has a chance with Workout Buddy to show how its approach is different in a meaningful way. After the lukewarm debut of Apple Intelligence on the iPhone, Workout Buddy is the first time we’re seeing what Apple can do with AI on the watch. 

The public beta version of WatchOS 26 is out. I recently tested Workout Buddy in the developer beta of WatchOS 26 and was genuinely surprised by how it made me feel after a walk. I spoke with Jay Blahnik, Apple’s vice president of fitness technologies, and Deidre Caldbeck, senior director of Apple Watch product marketing, to get more clarity around the feature, and unpack the tech and philosophy behind it. And the sense that I got from them is that Apple’s marathon toward personalized, intelligent coaching is only getting started.

Don’t call it a coach… yet

When Apple introduced Workout Buddy at WWDC in June, many Apple Watch fans (including myself) were quick to critique Workout Buddy for being more of a hype man/woman, than a trainer. Compared to competitors such as Fitbit, Garmin and recently Samsung, all of which already offer some form of AI-powered adaptive coaching plan, Workout Buddy with its real-time feedback is more like a cheerleader than a strategist.

It’s easy to overlook what Apple set in motion, by focusing on what Workout Buddy isn’t. The feature is designed to be a motivating presence during your workout, not a drill sergeant. It delivers contextual, personalized encouragement that’s dynamically generated in real time across eight supported workout types: indoor/outdoor walks and runs, outdoor cycling, HIIT, Functional Strength Training and Traditional Strength Training.

«We didn’t want it to be just a pro tool,» Blahnik told me. «We wanted it to be accessible to as many people as possible.»

Workout Buddy requires you wear headphones. I’m a no-frills runner, who’d rather use 2 extra minutes to work out than spend them searching for a headset and choosing the perfect playlist (WatchOS 26 will soon take care of this too). So I wasn’t sold on the idea of using Workout Buddy rather than just tracking my regular pace and heart rate alerts on the wrist with my Apple Watch. And while I’m still not fully onboard with the whole audio gear requirement, I didn’t mind having the Workout Buddy version of my alerts in my ear reminding me that I’d reached my cruising range (that is, my target training zone).

When I launched my first walk workout, I toggled Workout Buddy on and was greeted with a quick summary of my week so far. «This is your fourth walk this week,» it reminded me, and framed it in the context of how close I was to closing my rings. It wasn’t groundbreaking, but it was surprisingly helpful to have that context delivered in a conversational tone, rather than buried in a graph somewhere.

«It’s not a coach, but it is designed to take your data and try to deliver it to you at the right time,» explained Blahnik, «in a way that inspires you and doesn’t get in the way.»

My Workout Buddy did start to get a little too chatty though when I hit some hills during my walk and my heart rate started spiking. Because my HR was constantly teetering above and dipping below my target, the alerts were hitting my ear every few seconds. Luckily, you can tweak or disable HR alerts entirely for each individual workout. My personal sweet spot involved removing just the high HR alert.

A decade of sweat equity and a team of trainers 

Workout Buddy was not just Apple’s whimsical creation made to prove that the company can do AI for health and workouts. It’s the result of a decade of fitness data, an inspiring team of Fitness Plus trainers, and the technical lift of Apple Intelligence, Caldbeck told me.

«This was such a great time for it to happen because three things came together,» Caldbeck said. «Ten years of sweat equity, your personal fitness data. Our Fitness Plus trainers. And Apple Intelligence, which gave us the technical capabilities to push it forward.»

I could feel all three in the final product. The voice I heard isn’t just some generic audio prompt, which is what I was used to from these types of features on other devices. It’s a generative model trained on the voices of 28 actual Fitness Plus trainers. The tone, energy, and phrasing feels intentional and personal.

«It’s not a recording,» Caldbeck emphasized. «There was no script. It’s generated in the moment using your workout data and the voice model, and it will sound different every time.»

When I first set up Workout Buddy on my Apple Watch Series 10, I was prompted to choose from one of three distinct voices. They weren’t the tough-love trainer I’d envisioned would whip me into the best shape of my life, but they did sound like someone I’d trust to help me get there. Authoritative, energetic and strangely human. A far cry from the telemarketer-style robo-coach voices I’ve encountered in other programs.

There was a moment when Workout Buddy tipped its hand as something being less than human. It came during a mile-mark check-in, right after I’d crested what I considered a steep hill. It reported my stats: «One mile in, 230 feet of elevation gain.» Then it paused and declared, «That’s a mild elevation gain!» The tone was so emphatic, you’d think I’d just scaled Everest. It wasn’t the message that stood out; it was the delivery. A real person would’ve said «mild» matter of factly. But this was delivered with such over-the-top cheer that it almost felt like sarcasm. But the mismatch between tone and achievement made it sound like my wrist was gently roasting me for doing the bare minimum. 

Personalization, with privacy at the core

The personalization isn’t just about your data, it’s about how it’s delivered. Workout Buddy can adapt to your habits, preferences, and even time of day.

«There’s something really remarkable about knowing that whatever they’re saying is unique to that moment, and that you’re not just going to trigger that same sentence on your run again the next day, even if you’ve done the same thing,» said Blahnik.  

At the end of the walk, Workout Buddy summarized my stats, distance and calories. And it shared one meaningful nugget: My walk was my fastest pace in four weeks. That hit me harder than I expected. I’ve been coming off a knee injury that’s kept me from running for five weeks, and hearing that small gain was the moment I realized I might be on the mend. It was the kind of contextual insight I’d usually have to dig out on my own, in this case surfaced in my ear without having to think about it.

Under the hood, Apple is balancing Workout Buddy’s intimacy with its long-standing privacy approach. The feature uses a combination of on-device processing (on both your watch and iPhone) and private cloud computation to generate responses in real time. None of your personal fitness data is shared externally.

«We know this is your most personal data,» said Caldbeck. «So we wanted to treat it appropriately, but still give you powerful insights.»

This cautious approach matters. Trust will be the foundation for any future health coaching Apple delivers through AI.

A vision that’s just at the starting line

While Workout Buddy is only available to those with Apple Intelligence-supported iPhones, all Apple Watch users will still benefit from other updates in WatchOS 26. The limitation isn’t about exclusivity, it’s about processing power. Generating real-time, personalized voice feedback requires the kind of on-device performance that current Apple Watch hardware alone can’t handle. At least not yet.

The Apple Watch’s Workout app has the biggest navigation overhaul since it launched in 2015. Core features like interval training and pace alerts, previously buried in menus, are now front and center. Media integration also improved, with dynamic Apple Music suggestions based on your typical workouts that will play as soon as you start your workout.

«We kept our focus on making these features as personal and easy to use as possible,» Blahnik said, «pushing the workout app further than it’s ever been.»

That framing, focused on simplicity, accessibility and personalization, is key to understanding Apple’s strategy. While other companies rush to launch full-blown AI fitness coaches, Apple is taking a more deliberate path: It’s building the infrastructure to handle your data and translate it into meaningful, real-time guidance.

Apple’s been here before with adding native sleep tracking to the Apple Watch. The company waited until it had a clinical reason and subsequently a trustworthy implementation with Sleep Apnea alerts, even while competitors had long offered basic sleep tracking features.

«We almost always start our features to be really welcoming and inclusive and simple to use. We think that there’s a really bright future for where this can go as well,» Blahnik told me.

Apple’s long game

Of course Apple will never tell us where its sights are set next, but you don’t have to be a rocket scientist to draw the connections of where this is all headed. 

«When we think about the future, all the ways with which we can push this feature to be even more personalized, we think its really, really exciting,» Blahnik noted.

Workout Buddy may seem lightweight now, but it proves that real time data analysis is already a possibility on the Apple Watch, and it can deliver them in a way that feels motivating and deeply personal. More importantly, it’s testing the waters. It’s accessible, friendly, and non-threatening; something even a beginner might be inclined to use.

It’s setting the stage for what could be next: an AI-powered coach that helps you make sense of all your data beyond just the Workout app to help motivate you and lead you to build healthier habits that will lead to measurable improvements. If Apple plays this right, the long game may actually pay off. Because building trust, delivering real insights and meeting people where they are is how you win the marathon.