The Federal Reserve lowered the Fed Funds Rate
The Federal Reserve lowered the Fed Funds Rate ¼% on September 17th.
What does this mean for the consumer?
The Federal Reserve lowered the Fed Funds rate ¼% to 4.25%. This is the rate the Federal Reserve lends money to banks to lend to Consumers. This will directly influence auto loans, personal loans, and Home Equity Lines of Credit.
The Fed Funds rate does not directly influence 30 year fixed mortgage rates. Although they do tend to move in unison. As a matter of fact, the 30 year fixed mortgage rate INCREASED about 1/8% last week after the Fed announcement!
This is due to a typical “by the rumor sell the fact” situation. 30 year fixed mortgage rates dropped about 3/8% weeks preceding the Federal Reserve announcement. If the Federal Reserve continues to lower the Fed Funds rate 30 year fixed mortgage rates should follow. But it will take time.
Have questions? Reach out to myelf or one of our experienced Loan Advisors today! 719-228-6055
Ryan Herbig
Branch Manager & Sr. Loan Advisor
NMLS# 238361