The Federal Reserve lowered interest rates this week with the intent of stimulating the labor economy and freeing up purchasing power for households.
Rates came down by a quarter of a percentage point on Wednesday, now teetering between 4% and 4.25%. It was the first time the Fed lowered rates in 2025, but the nation’s central bank also indicated that another cut could come later this year. It has a stated goal of getting rates down to 2%.
Interest rates play into how households and businesses borrow money. Since they’re imposed on short-term bonds and loans, they shape how people feel about their finances in the short-term. Conversely, mortgage rates tend to fluctuate based on a longer-term economic outlook, said Nick Kristoff, branch manager at CrossCountry Mortgage in Bluffton. They’re not completely separate, Kristoff said, but lower interest rates from the Fed does not mean lower mortgage rates…