Mortgage rates, the basic primer
Although the Fed's latest rate cut did not surprise financial analysts, analysts were unsure how much farther the Fed would be willing to cut. The rate cut should be a boon to borrowers. The Fed's interest rates strongly influence lender set interest rates, leading consumer rates on mortgages, auto loans, credit cards, and similar types of debt to trend downward when the Fed cuts rates. Mortgage rates are especially prone to react. They tend to rise or fall in tandem with Fed managed bank rates, and are therefore in a prime position to benefit from rate cuts.