Why did rates go UP after the Fed CUT rates last week?

The Fed dropped the federal funds rate by 0.25 percent which is their first move toward easing after a long stretch of high rates. But mortgage rates actually ticked higher and here is the part most people miss.

Investors expected a bigger cut. When the Fed hinted that future cuts are not guaranteed the market adjusted and pushed bond yields higher. Mortgage rates follow bonds not the Fed so the 10 year Treasury jumped and took mortgage rates with it.

Inflation is still sticky and job growth is cooling which makes long term investors demand higher returns. Translation mortgage rates may stay elevated even though short term rates softened a bit.

If you are house hunting or planning to refinance timing matters more than ever. Locking in when the numbers make sense is still key.

If you want a breakdown for your scenario or want to see if now is a good time to lock just message me.

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