Josh Wilkinson Realtor

The Fed just announced that they are cutting the Fed Funds Rate by .25%. Here are few things that you should know:

1. The Fed does not control mortgage rates.
2. The Fed sets the Fed Funds Rate and Discount Rates. These are the costs for overnight loans from bank to bank, or from the Fed to member banks.
3. When the Fed cuts their rates, mortgage rates can actually rise. Lower Fed rates can be good for stocks, so investors often sell mortgage bonds to raise cash for stock investments. When bond prices fall, mortgage rates rise.
4. Rates may already reflect Fed cuts. Investors regularly speculate and place their bets in anticipation of Fed action. This will move markets in advance of the news.

Don’t understand all of this? That’s alright too. I'm always available to help and I have amazing lenders who can tell you exactly what it means for you.