The Fed lowers interest rates to 2 percent the 18th of March, what will the interest rate be for a mortgage?

Actually the interest rate for a 15y mortgage is about 5.5%. What is the interest going to be after March 18th.The Fed lowers interest rates to 2 percent the 18th of March, what will the interest rate be for a mortgage?
We don't expect the fed to drop it to 2%, may be lowering .5 or .75 is more likey.





The fed rate isn't relate to mortgage interest rates.





In fact, mortgage rates can and do often rise when the fed cuts rates.





We can never predict mortgage interest rates, they can change multiple times in a day.





Here's a good explanation from


Barry Habid, contributer to CNBC





So the Federal Reserve cut rates again. Many mortgage applicants are calling their mortgage representative


and expecting a lower interest rate. Others who have been waiting to refinance are puzzled as to why mortgage


rates have not moved lower during recent 5 Fed rate cuts. In fact mortgage rates are now higher than they


were before the Fed began cutting rates by in January. This is difficult to explain to many consumers who have


watched a 2.5% reduction by the Fed with no benefit in mortgage rates.


Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control


the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates. A mortgage rate can be


in effect for 30-years, a rate that is set by the Fed can change from one day to another.


Another common mistake is in thinking that 30-year Treasury bonds or 10-year Treasury notes are directly


pegged to mortgage rates.


Those are government securities that are backed by the full faith and credit of the U.S. government and have


no direct effect on mortgage rates.


So what are mortgage rates based on? As it turns out the answer is mortgage-backed bonds known as


Mortgage Backed Securities (MBS). Bonds issued by Fannie Mae and Freddie Mac (MBS) and the trading


performance of those bonds will determine the direction of mortgage rates. Finding the catalyst that causes


mortgage bonds to move will give you the keys to finding out what makes mortgage rates rise or fall.


We know that inflation will always be a negative for any long-term bond because it eats away at the future


returns. Since the bond will pay a set amount over a long period of time, that amount will be less valuable if


inflation is high. Over the past several years, one catalyst that seems to be working in the opposite direction of


MBS prices is the Nasdaq and broader stock market.


As bond prices rise, interest rates fall. As bond prices fall, interest rates rise.The Fed lowers interest rates to 2 percent the 18th of March, what will the interest rate be for a mortgage?
These two actions are not necessarily tied together. Fed lowering may not result in mortgage rate lowering. The risk of making mortgages has gone up and the rates could even rise. The 15-year may go down another .50 if the fed lowers .50 or .75. Capital is very tight now and lenders are very nervous.
The two are NOT directly linked.
Claudio-


They are not directly related, but based on levels of unemployment, debt and inflation, most likely it will hurt the mortgages, for the next couple of days until the 18th investors will be more likely to put money on mortgage backed securities since they feel a little safe with the feds cutting another 0.50% so I would get pre-qualified now because rates will more likely to go down before, but after the 18th top economists and analysts feel that it will hurt the mortgage rates and in return they will go up. Now my company has also analyzed mortgage trends data over the last 26 years and we actually agree with it too.





Hope this helps