If You're One of Those People Asking How Much Lower Your Mortgage Rate Quote is After Fed Day, This is Required Reading
It's day two of mortgage rates surging higher--now back to the highest levels in 2 weeks (the day before the September 5th jobs report). The juxtaposition of yesterday's Fed rate cut and the sudden mortgage rate spike is incredibly confusing to most of the population, so let's clear it up.
SHORT VERSION:
The Fed Funds Rate (FFR) doesn't dictate mortgage rates
The FFR only changes on Fed announcement days, 8 times a year. It changes in response to various economic reports and events.
Mortgage rates change daily and the bonds that drive mortgage rates change in real-time throughout the day. That means mortgage rates can drop for all the same reasons that drove yesterday's rate cut.
Because those reasons were already in play well before yesterday, mortgage rates had
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