Fed is cutting rates does that help us on the mortgage side and lets close your loan this month for homestead

✅ Why mortgage rates can rise even when the Fed cuts rates

Mortgage rates don’t move directly with the Fed Funds Rate. Instead, they are primarily driven by the 10-year Treasury yield and investor expectations about inflation, recession risk, and future Fed policy.

Here are the main reasons this disconnect happens:

1. Markets expected the rate cut already

If investors already priced in the Fed’s cut weeks or months beforehand, then the cut itself is old news.
When the announcement hits, mortgage rates may not fall—and often rise if the Fed hints at fewer future cuts.

2. Fed cuts can signal economic trouble

Sometimes the Fed cuts because the economy is weakening. That can cause:

Investors to worry about higher future inflation, or

A “risk-off” move where money leaves bonds

Both of these drive the 10-year yield UP, which pushes mortgage rates UP even though the Fed cut.

3. Bond investors wanted a bigger cut

If markets expect a 0.50% cut but the Fed only delivers 0.25%, that’s seen as “too tight.”
Result:

10-year yield jumps

Mortgage rates move higher

4. Fed messaging (“forward guidance”) matters more than the cut

Example:
The Fed cuts today, but says:

“We may need to slow or pause future cuts.”

That single sentence can raise mortgage rates, even though short-term rates just went lower.

5. Inflation surprises after the cut

If new inflation data comes in hot after a Fed cut, the bond market panics → yields go up → mortgage rates go up.

Quick summary
Fed Cuts Rates Mortgage Rates Move
✔ Expected or priced in Can rise or stay flat
✔ Fed hints at fewer future cuts Often rise
✔ Inflation remains sticky Rise
✔ Economy looks unstable Rise
❗ Only when 10-year yield falls Mortgage rates fall

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