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

Today’s NYT Connections Hints, Answers and Help for Dec. 24, #927

Here are some hints and the answers for the NYT Connections puzzle for Dec. 24 #927

Looking for the most recent Connections answers? Click here for today’s Connections hints, as well as our daily answers and hints for The New York Times Mini Crossword, Wordle, Connections: Sports Edition and Strands puzzles.

Today’s NYT Connections puzzle is kind of tough. Ooh, that purple category! Once again, you’ll need to look inside words for hidden words. Read on for clues and today’s Connections answers.

The Times has a Connections Bot, like the one for Wordle. Go there after you play to receive a numeric score and to have the program analyze your answers. Players who are registered with the Times Games section can now nerd out by following their progress, including the number of puzzles completed, win rate, number of times they nabbed a perfect score and their win streak.

Read more: Hints, Tips and Strategies to Help You Win at NYT Connections Every Time

Hints for today’s Connections groups

Here are four hints for the groupings in today’s Connections puzzle, ranked from the easiest yellow group to the tough (and sometimes bizarre) purple group.

Yellow group hint: Cash out.

Green group hint: Chomp

Blue group hint: Walleye and salmon.

Purple group hint: Make a musical sound, with a twist.

Answers for today’s Connections groups

Yellow group: Slang for money.

Green group: Masticate.

Blue group: Fish.

Purple group: Ways to vocalize musically plus a letter.

Read more: Wordle Cheat Sheet: Here Are the Most Popular Letters Used in English Words

What are today’s Connections answers?

The yellow words in today’s Connections

The theme is slang for money. The four answers are bacon, bread, cheese and paper.

The green words in today’s Connections

The theme is masticate. The four answers are bite, champ, chew and munch.

The blue words in today’s Connections

The theme is fish. The four answers are char, pollock, sole and tang.

The purple words in today’s Connections

The theme is ways to vocalize musically plus a letter. The four answers are hump (hum), rapt (rap), singe (sing) and whistler (whistle).

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Toughest Connections puzzles

We’ve made a note of some of the toughest Connections puzzles so far. Maybe they’ll help you see patterns in future puzzles.

#5: Included «things you can set,» such as mood, record, table and volleyball.

#4: Included «one in a dozen,» such as egg, juror, month and rose.

#3: Included «streets on screen,» such as Elm, Fear, Jump and Sesame.

#2: Included «power ___» such as nap, plant, Ranger and trip.

#1: Included «things that can run,» such as candidate, faucet, mascara and nose.

Technologies

Today’s NYT Mini Crossword Answers for Wednesday, Dec. 24

Here are the answers for The New York Times Mini Crossword for Dec. 24.

Looking for the most recent Mini Crossword answer? Click here for today’s Mini Crossword hints, as well as our daily answers and hints for The New York Times Wordle, Strands, Connections and Connections: Sports Edition puzzles.

Need some help with today’s Mini Crossword? I’m Irish-American, but yet 6-Down, which involves Ireland, stumped me at first. Read on for all the answers.. And if you could use some hints and guidance for daily solving, check out our Mini Crossword tips.

If you’re looking for today’s Wordle, Connections, Connections: Sports Edition and Strands answers, you can visit CNET’s NYT puzzle hints page.

Read more: Tips and Tricks for Solving The New York Times Mini Crossword

Let’s get to those Mini Crossword clues and answers.

Mini across clues and answers

1A clue: Wordle or Boggle
Answer: GAME

5A clue: Big Newton
Answer: ISAAC

7A clue: Specialized vocabulary
Answer: LINGO

8A clue: «See you in a bit!»
Answer: LATER

9A clue: Tone of many internet comments
Answer: SNARK

Mini down clues and answers

1D clue: Sharks use them to breathe
Answer: GILLS

2D clue: From Singapore or South Korea, say
Answer: ASIAN

3D clue: Large ocean ray
Answer: MANTA

4D clue: ___ beaver
Answer: EAGER

6D clue: Second-largest city in the Republic of Ireland, after Dublin
Answer: CORK

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Technologies

Quadrantids Is a Short but Sweet Meteor Shower Just After New Year’s. How to See It

This meteor shower has one of the most active peaks, but it doesn’t last for very long.

The Quadrantids has the potential to be one of the most active meteor showers of the year, and skygazers won’t have long to wait to see it. The annual shower is predicted to reach maximum intensity on Jan. 3. And with a display that can rival Perseids, Quadrantids could be worth braving the cold to see it.

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The show officially begins on Dec. 28 and lasts until Jan. 12, according to the American Meteor Society. Quadrantids is scheduled to peak on Jan. 2-3, when it may produce upwards of 125 meteors per hour. This matches Perseids and other larger meteor showers on a per-hour rate, but Quadrantids also has one of the shortest peaks at just 6 hours, so it rarely produces as many meteors overall as the other big ones.

The meteor shower comes to Earth courtesy of the 2003 EH1 asteroid, which is notable because most meteor showers are fed from comets, not asteroids. Per NASA, 2003 EH1 is a near-Earth asteroid that orbits the sun once every five and a half years. Science posits that 2003 EH1 was a comet in a past life, but too many trips around the sun stripped it of its ice, leaving only its rocky core. The Earth runs through EH1’s orbital debris every January, which results in the Quadrantids meteor shower.

How and where to see Quadrantids

Quadrantids is named for the constellation where its meteors appear to originate, a point known as the radiant. This presents another oddity, as the shower originates from the constellation Quadrans Muralis. This constellation ceased to be recognized as an official constellation in the 1920s and isn’t available on most publicly accessible sky maps.

For the modern skygazer, you’ll instead need to find the Bootes and Draco constellations, both of which contain stars that were once a part of the Quadrans Muralis. Draco will be easier to find after sunset on the evening of Jan. 2, and will be just above the horizon in the northern sky. Bootes orbits around Draco, but will remain under the horizon until just after 1 a.m. local time in the northeastern sky. From that point forward, both will sit in the northeastern part of the sky until sunrise. You’ll want to point your chair in that direction and stay there to see meteors.

As the American Meteor Society notes, Quadrantids has a short but active peak, lasting around 6 hours. The peak is expected to start around 4 p.m. ET and last well into the evening. NASA predicts the meteor shower to start one day later on Jan. 3-4, so if you don’t see any on the evening of Jan. 2, try again on Jan. 3.

To get the best results, the standard space viewing tips apply. You’ll want to get as far away from the city and suburbs as possible to reduce light pollution. Since it’ll be so cold outside, dress warmly and abstain from alcoholic beverages, as they can affect your body temperature. You won’t need any binoculars or telescopes, and the reduced field of view may actually impact your ability to see meteors.

The bad news is that either way, the Quadrantids meteor shower coincides almost perfectly with January’s Wolf Moon, which also happens to be a supermoon. This will introduce quite a lot of light pollution, which will likely drown out all but the brightest meteors. So, while it may have a peak of over 100 meteors per hour, both NASA and the AMS agree that the more realistic expectation is 10 or so bright meteors per hour.