The Federal Reserve’s interest rate decisions indirectly influence mortgage costs by affecting investor demand for debt products, such as treasury bills and mortgage-backed securities. As the Fed decreases its debt holdings, particularly mortgage-backed securities, this could exert upward pressure on mortgage rates, keeping them elevated despite potential reductions in the federal funds rate heading into 2025. Consequently, Americans may face continued higher mortgage rates, underscoring the complex relationship between Federal Reserve policies and individual mortgage payments.
