Market Update: What The Fed Rate Cut Means for You

The Federal Reserve just announced a 0.25% (25 bps) cut to the Prime Rate — its third consecutive cut this year. This move brings the new benchmark range down to 3.50%–3.75%.

While this is important economic news, it’s also important to note: this is not a direct cut to mortgage rates. In fact, most mortgage lenders had already priced this move into their rates weeks ago.

Fed Chair Jerome Powell emphasized a “wait and see” approach from here — meaning any future cuts will depend on how the economy performs in the months ahead. The bar for additional rate reductions is now higher.

What this means for housing and mortgage shoppers:We’re likely entering a period of relative stability, where mortgage rates may move within a narrow range rather than fall quickly. For buyers and homeowners, this creates a window to plan strategically — whether that’s locking in a rate, refinancing, or preparing for future opportunities.

In short: the Fed did what was expected, but signaled that future moves will be cautious and data-driven. Flexibility will be key as we watch how the economy evolves into 2026.

Fun fact: Fed rates do not relate directly to mortgage rates. It is not uncommon to even see an uptick in mortgage rates with Fed rate cuts. Mortgage rates will often anticipate if a rate cut will likely be coming and bake that cut into rates even weeks before the actual rate change.