What the Latest Fed Rate Cut Means for Your Future Mortgage

The Federal Reserve has reduced the federal funds rate by 0.25%, bringing the target range to 4.25% to 4.5%. This marks the third interest rate cut for the year, following reductions of 50 basis points in September and 25 basis points in November. The decision came after assessment of economic risks and inflation by the Federal Open Market Committee. Lower rates typically lead to reduced borrowing costs for consumer loans, including credit cards and personal loans. However, experts indicate that the recent rate cut will not impact mortgage rates, which currently stand at an average of 7.13% for a 30-year fixed mortgage. Factors like rising 10-year Treasury bonds influence mortgage rates, leading to a lag in lower residential loan rates. Future rate cuts will depend on incoming economic data.

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