Myth vs. Reality: Does the Fed Control Mortgage Rates?
You've probably heard the Federal Reserve (the Fed) is raising rates again. And if you're planning to buy or sell a house, you may be wondering what that means for you. With all the headlines, it’s easy to think the Fed sets mortgage rates . That’s actually a common myth. But the Fed’s decisions can still have an impact on them. So, where does that leave you? The next few months could get a little bumpy. But the Fed is playing the long game. And with the right plan, you can still make a move that works. Let’s break it down. Why the Fed Is Raising Rates It all comes back to inflation. With prices rising fast, everything is getting more expensive – and that leaves buyers with less spending power and makes homes cost more to build. So, the Fed raises its key short-term rate (the Federal Funds Rate) to slow down inflation. And that’s where a lot of people get tripped up. MYTH: The Fed controls mortgage rates. REALITY: The Fed has an impact on mortgage rates, but it’s only one pi...
