Quick answer: A Fed rate cut does not guarantee lower mortgage rates. The Fed controls a short-term rate, while 30-year mortgage rates follow longer-term yields such as the 10-Year Treasury. After 1.75 points of Fed cuts since September 2024, the 30-year rate was about 6.2% in December 2025, roughly where it started, because the 10-Year yield rose.
On December 10, 2025, the Federal Reserve cut interest rates for the third straight meeting. That brought its total cuts to 1.75 percentage points since it started cutting in September 2024.
So mortgage rates must be much lower now, right?
Not really.
The average 30-year fixed mortgage rate was around 6.1% when the Fed made its first cut in September 2024. In mid-December 2025, after six cuts, it was about 6.2%. In between, it climbed to nearly 7% in early 2025.
That is an important lesson about how mortgage rates really work.
Does the Fed Set Mortgage Rates?
No. When people hear that “the Fed cut rates,” it is easy to assume all interest rates should fall.
But the Federal Reserve primarily controls a short-term interest rate.
Thirty-year fixed mortgages are long-term loans. Their rates tend to move much more closely with longer-term bond yields, particularly the 10-Year U.S. Treasury.
What Happened to the 10-Year Treasury After the Fed Started Cutting?
Right before the Fed’s first cut in September 2024, the 10-Year Treasury yield was around 3.65%.
In mid-December 2025, after 1.75 points of Fed cuts, it was around 4.1%, about half a percentage point higher.
While the Fed pushed short-term rates lower, investors wanted higher yields to lend money for longer periods. Mortgage rates followed the longer-term market, not the Fed.
Why Did the 10-Year Treasury Rise?
Because long-term interest rates are not based only on what the Federal Reserve is doing today.
Investors are trying to determine what their money will be worth years from now. That means weighing inflation, economic growth, government borrowing and geopolitical uncertainty.
Inflation is particularly important. If investors believe inflation may stay higher than expected, the dollars they are repaid will have less purchasing power, and they may demand a higher interest rate to compensate.
So even as the Fed lowered short-term rates, concerns about the longer-term outlook kept pressure on Treasury yields.
What Does This Teach Us About Mortgage Rates?
A Fed rate cut does not guarantee lower mortgage rates.
The Fed matters. But for fixed mortgage rates, what is happening with inflation and the 10-Year Treasury can matter even more. That is why mortgage rates can stay stubbornly high while the Federal Reserve is moving short-term rates in the opposite direction.
What Should You Watch If You Are Waiting for Lower Mortgage Rates?
Do not focus only on the next Federal Reserve meeting.
Watch inflation and the 10-Year Treasury too. Cooling inflation and falling Treasury yields would be encouraging signs that mortgage rates could have room to move lower.
At Tithe Lending, we follow the factors that actually move mortgage rates so we can help borrowers evaluate today’s opportunities, not simply wait for the next Fed announcement.
Frequently Asked Questions
Will mortgage rates go down if the Fed cuts rates again?
Not necessarily. Mortgage rates depend more on the 10-Year Treasury yield, inflation expectations and investor demand for mortgage bonds than on any single Fed decision.
How are mortgage rates related to the 10-Year Treasury?
Thirty-year mortgage rates usually sit well above the 10-Year Treasury yield, and the two tend to move in the same direction. The gap between them changes with market conditions.
Next step: Watching rates and wondering what to do? Tell us your plans and we will show you what today’s rates mean for you and whether waiting makes sense.
No obligation. You will answer a few quick questions about your refinance so we can offer you the best options. It only takes a few minutes.
Sources
- Federal Reserve, FOMC statement, December 10, 2025
- Freddie Mac, Primary Mortgage Market Survey (archive of weekly 30-year averages)
- Federal Reserve H.15 via FRED, 10-Year Treasury yield
Tithe Lending LLC | NMLS #2439006 | Equal Housing Lender. General information only; not a loan offer or financial, tax or legal advice.