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Interest Rates

The Fed's Rate Decisions vs. Mortgage Rates: What Is the Difference?

The Federal Reserve sets one short-term rate. Mortgage rates follow a different set of forces. Here is how the two relate, with the recent decisions.

INTEREST RATES · SEPTEMBER 2026

When the news says the Fed changed rates, homebuyers naturally ask what happens to mortgage rates. The two are related, but they are different numbers set in different ways.

What the Federal Reserve sets

The Federal Open Market Committee sets a target range for the federal funds rate, the rate banks charge one another for overnight loans. It is a short-term rate that influences borrowing costs across the economy.

What mortgage rates follow

A 30-year fixed mortgage rate is a long-term rate. It tends to track longer-term market yields, especially the 10-year Treasury, plus the extra cost investors and lenders charge for the risk and servicing of home loans. Lenders also price each loan using credit score, down payment, loan type and lock period.

Recent Fed decisions

The federal funds target range has been 3.75% to 4.00% since Sep 17, 2026. Here is every change since 2022.

View the numbers
Federal funds target range changes since 2022
DateTarget rangeChange
Mar 17, 20220.25% to 0.50%Raised 25 basis points
May 5, 20220.75% to 1.00%Raised 50 basis points
Jun 16, 20221.50% to 1.75%Raised 75 basis points
Jul 28, 20222.25% to 2.50%Raised 75 basis points
Sep 22, 20223.00% to 3.25%Raised 75 basis points
Nov 3, 20223.75% to 4.00%Raised 75 basis points
Dec 15, 20224.25% to 4.50%Raised 50 basis points
Feb 2, 20234.50% to 4.75%Raised 25 basis points
Mar 23, 20234.75% to 5.00%Raised 25 basis points
May 4, 20235.00% to 5.25%Raised 25 basis points
Jul 27, 20235.25% to 5.50%Raised 25 basis points
Sep 19, 20244.75% to 5.00%Lowered 50 basis points
Nov 8, 20244.50% to 4.75%Lowered 25 basis points
Dec 19, 20244.25% to 4.50%Lowered 25 basis points
Sep 18, 20254.00% to 4.25%Lowered 25 basis points
Oct 30, 20253.75% to 4.00%Lowered 25 basis points
Dec 11, 20253.50% to 3.75%Lowered 25 basis points
Sep 17, 20263.75% to 4.00%Raised 25 basis points

Why the two can move differently

  • Mortgage rates often move before a Fed meeting, because markets price in what they expect.
  • A Fed change that was widely expected may barely move mortgage rates on the day.
  • Long-term yields respond to expectations about growth and inflation, not only to the Fed's next step.
  • Lender pricing, investor demand for mortgage bonds and loan-specific factors add their own effects.

For context, the Freddie Mac survey average for a 30-year fixed mortgage was 7.03% in the week of Sep 24, 2026, compared with 6.95% the week before.

What to watch

The Federal Reserve publishes its meeting calendar and statements. The Investing.com Fed Rate Monitor shows how futures markets are pricing upcoming meetings. Neither predicts what will happen, and neither sets your mortgage rate. Your lender's quote does.

Talk to a lender. Rates, loan programs and approvals come from lenders, not from websites or real estate agents. Talk to your own mortgage broker, or use our preferred lender, Rodrigo Ballon with CrossCountry Mortgage, at 858-735-0255. You are always free to choose any lender you like, and you can verify any lender’s license at nmlsconsumeraccess.org.

Where these numbers come from

Data as of Sep 24, 2026. These pages describe the past and the present and make no predictions. Investing.com and the other sources are independent of Rudy Flores and Coldwell Banker West.

More on interest rates

General information, not financial advice.

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