Good Thursday morning from your Hometown lender,

The day after and similarly to the last three prior rate cuts…

Mortgage rates bounced a bit higher after the cut. That means rates aren’t at the lowest levels we saw over the last couple of days, but they are still lower than a week ago. No need to be overly dramatic, bonds were down enough to notice but not to get concerned about…

Quick recap of yesterday‘s Fed activity…

The Fed cut rates by a quarter-point, as expected, and the dot plot did indeed signal that most members felt there would be two more cuts (for a total of three) for the year. The initial reaction in bonds was good, with mortgage bonds up at one point as much as +20bps. However, the enthusiasm started to dwindle heading into Fed Chair Jerome Powell’s press conference, where Powell made things worse.

During his press conference, Powell basically shrugged off the dot plot and gave a much more hawkish tone than anyone expected. In fact, many of his replies to questions about future moves were muddled and almost like he was talking in circles. He made it sound like the Fed would follow through on a couple more cuts this year but then wouldn’t need to cut further. He also didn’t seem too worried about the labor market weakness, defended the fact that the Fed has not cut rates this year sooner, and although he didn’t shut the door on the next couple of cuts he wasn’t going out of his way to signal, they were coming. Ultimately Powell’s comments were bad for bonds, and during his press conference we saw bonds continue to give up gains and even sink into the red, leading to a lot of lender reprices worse.

The 10yr treasury yield is a bit more concerning for me at the moment.

The yield was as low as 3.99% 24 hours ago. Now at 4.11%, that’s .12% higher because of Fed Chairman Powell’s commentary as well as weaker jobless claims this am. Hopefully you locked before yesterday’s Fed meeting. If not, patience is a virtue.

Some higher level insight…

🏦 Mortgage Market & Rate Analysis
Wednesday, September 18, 2025

📊 Where Rates Stand Today

30-Year Fixed: ~6.13%–6.26% (lowest in nearly a year)
15-Year Fixed: ~5.20%–5.44%
10-Year Treasury Yield: ~4.06%–4.09%

Trend: Rates have dropped steadily over the past two weeks, driven by softer economic data and anticipation of Fed easing.

📰 Today’s Economic & Market Highlights

Federal Reserve Rate Cut (9/17): The Fed lowered its benchmark rate by 25 basis points to a range of 4.00%–4.25%. This was the first cut since December 2024 and was widely expected.
Mortgage Rate Reaction: Rates had already declined in anticipation of the cut. Today’s average 30-year fixed rate is around 6.23%, down from 6.35% last week.
Retail Sales (9/16): August retail sales were flat, signaling cautious consumer spending — a rate-friendly sign.
Housing Starts & Jobless Claims (9/18): Scheduled for release today. If housing starts slow and jobless claims rise, it could reinforce the case for further rate cuts.

🗓 Weekly Recap & Market Drivers

Labor Market Weakness: August jobs report showed just 22,000 new jobs and rising unemployment. BLS revisions cut prior-year job growth by 911,000.
Inflation Mixed: CPI came in slightly hotter on headline numbers, but “supercore” inflation cooled. PPI was tame.
Fed Messaging: Chair Powell called the cut a “risk-management” move and emphasized future decisions will depend on incoming data. The Fed’s dot plot shows a slim majority expecting two more cuts this year.

🏛 Political & Policy Developments

Fed Dissent: One Fed governor, Stephen Miran, pushed for a larger cut, reflecting political pressure for more aggressive easing.
Tariff Risks: Ongoing trade tensions and tariff threats are adding uncertainty to inflation forecasts.
Market Sentiment: Stocks rallied on the Fed’s move, but bond markets remain cautious, keeping mortgage rates in a narrow range.

🔮 Rate Outlook & What to Watch

Short Term (Next 1–2 Weeks):

If jobless claims rise and housing data softens, rates could dip further.
If inflation surprises or growth rebounds, expect rates to stabilize or tick up slightly.

Medium Term (Fall 2025):

If the Fed follows through with two more cuts and economic data stays soft, well-qualified borrowers could see rates in the high-5% range by year-end.
Risks include sticky inflation, weak Treasury auction demand, or geopolitical shocks.

📅 Key Economic Calendar – Sept 18–20, 2025

Wed 9/18: Jobless Claims, Housing Starts → High impact
Fri 9/20: Leading Economic Indicators → Medium impact

💡 How to Explain This to Clients

“Mortgage rates are now at their lowest levels in nearly a year; thanks to softer job growth and the Fed’s first rate cut of 2025. But because markets often move before the Fed — and sometimes bounce afterward — this could be a short-lived window. If you’re considering a refinance or purchase, now’s a great time to explore your options while rates are still favorable.”