"The Fed meets next on Oct. 28-29 and is widely expected to reduce the federal funds rate by 25 basis points. (A basis point is one one-hundredth of a percentage point, so 25 basis points is 0.25 percentage point.) But just in time for spooky season, the vibe is a little unsettling. Even if the Fed summons rate relief, the ghost of inflation lingers in the shadows - and no one wants a jump scare."
"I need the basics. Does the Fed set mortgage rates? No, the Federal Reserve doesn't set mortgage rates, but it does influence them. Imagine a messy group chat where everyone's trying to make dinner plans - that's like all the forces affecting mortgage rates. The Fed is your type-A friend who keeps up with the chaos and drops the calendar invite. Maybe the whole thing wasn't their idea, but they know how to wrangle the conversation into something concrete."
Federal Reserve policy influences mortgage rates through the federal funds rate, which sets the trend for other loan rates. The Fed meets roughly every six weeks and is widely expected to reduce the federal funds rate by 25 basis points at the Oct. 28-29 meeting. A basis point equals one one-hundredth of a percentage point, so 25 basis points is 0.25 percentage point. The Fed does not directly set mortgage rates; individual lenders set their own rates based on market conditions, inflation, consumer spending, and the job market. Comparing at least three lenders can lower borrowing costs. Lingering inflation keeps rate outcomes uncertain.
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