Mortgage Rates SURGE After Fed Rate Cut!

If you still need to be convinced that Fed rate cuts don't equate to lower mortgage rates, then just look at what happened today. Remember, the rate that the Federal Reserve controls, the federal funds rate, is not the same thing as mortgage rates. And after the Federal Reserve announced its latest rate cut after their December meeting, mortgage rates rose drastically. Before the Fed announced its latest cuts, the average lender was offering 30-year fixed rates in the high 6% range. After the rate cut announcement, it went up to over 7.1%. And that happened because of this chart. It's called the dot plot, and it shows what each Federal Reserve member thinks about the long-term future trajectory of its policy rate. The light blue dots is what they were predicting 3 months ago, and as you can see, for next year they were predicting in the low to mid 3% range. But now, as you can see in the dark blue, they're predicting mid to high 3% range. So less drastic rate cuts next year. In other words, higher for longer interest rates because of resilience in the inflation and labor markets. I track this information every single day as part of my job so you don't have to. So follow me along for more updates.