The Fed expects to cut rates more slowly in 2025. What that could mean for mortgages, debt and more

To combat ongoing inflation and concerns of future inflation that could be fueled by incoming President Donald Trump’s policies, the Fed has indicated they will cut rates more slowly in 2025 than initially planned. Fed policymakers now predict two rate cuts to take place in 2025, not the four that they originally suggested would occur. Borrowers may be disappointed with the reduced number of rate cuts, but any rate cut still has potential to reduce mortgage rates. Mortgage rates are driven by market outlook, and a cut by the Fed can put downward pressure on mortgage rates. The Fed is designed to pivot quickly in relation to quick economic upturns or downturns. For now they are taking a wait-and-see approach, and the next rate cut may not occur until March or later.

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