U.S Fed Interest rate cut decision: New Federal Reserve interest rates impact on 15-and 30-year mortgage rates. Check latest update

APFederal Reserve Chairman Jerome Powell speaks at a news conference after the Federal Open Market Committee meeting Wednesday, Oct. 29, 2025, at the Federal Reserve Board Building in Washington. (AP Photo) U.S. Federal Reserve on Wednesday cut interest rates by a quarter of a percentage point. The 10-2 decision to lower the policy rate to a range of 3.75 per cent-4.00 per cent was expected by investors as a way for the Fed to temper any further decline in a job market policymakers worry may be losing steam. The Federal Reserve cut its key interest rate for a second time this year as it seeks to shore up economic growth and hiring even as inflation stays elevated.Wednesday's decision brings the Fed's key rate down to about 3.9 per cent, from about 4.1 per cent. The central bank had cranked its rate to roughly 5.3 per cent in 2023 and 2024 to combat the biggest inflation spike in four decades. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans.Although mortgages account for the majority of consumer debt, these long-term loans are less directly influenced by Federal Reserve rate cuts. Both 15- and 30-year mortgage rates remain fixed for the life of the loan, meaning most current homeowners won’t see immediate changes in their monthly payments. Mortgage rates are instead more closely linked to movements in Treasury yields and broader economic conditions. However, analysts note that homebuyers could still see some relief if expectations of future rate cuts drive Treasury yields lower. That downward pressure could make borrowing slightly cheaper for new buyers and those looking to refinance.So far this year, mortgage rates declined after the Federal Reserve resumed cutting interest rates. The average rate on the popular 30-year fixed-rate mortgage dropped to 6.30 per cent at the end of September from about 6.56 per cent in August, data from mortgage finance agency Freddie Mac showed. It has since declined to a one-year low of 6.19 per cent. But lower mortgage rates have been somewhat overshadowed by growing anxiety over the labor market, with households instead taking advantage of the lower borrowing costs to refinance their mortgages.FAQsLive EventsQ1. Has US Fed cut interest rates?A1. Yes, US Federal Reserve has cut interest rates.Q2. How has been this year's mortgage rates?A2. So far this year, mortgage rates declined after the Federal Reserve resumed cutting interest rates. The average rate on the popular 30-year fixed-rate mortgage dropped to 6.30 per cent at the end of September from about 6.56 per cent in August, data from mortgage finance agency Freddie Mac showed. It has since declined to a one-year low of 6.19 per cent.Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) Read More News onFed Interest Rate Cut Federal Reserve Todayfederal reservefed decisionfed ratefederal reserve interest ratesJerome Powell (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates....moreless (You can now subscribe to our Economic Times WhatsApp channel)Read More News onFed Interest Rate Cut Federal Reserve Todayfederal reservefed decisionfed ratefederal reserve interest ratesJerome Powell(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates....moreless Explore More Stories123