The Fed’s Big Shift: Rate Cuts Despite High Inflation
In a surprising twist, the Federal Reserve is preparing to cut interest rates again — even though inflation remains higher than its 2% target.
According to MarketWatch and Yahoo Finance, this decision reflects growing concern that the U.S. job market is weakening, and the economy is losing steam. The Fed believes current rates are already “restrictive enough,” meaning they may be slowing growth more than intended.
But here’s the catch: the Fed is “flying blind.” Due to recent government data delays, policymakers are acting with limited visibility into real-time economic conditions — making this one of the riskiest rate-cut cycles in years.
What this means for borrowers:
Lower benchmark rates tend to translate into lower mortgage rates, especially for adjustable-rate loans and refinance opportunities. But the timing — and magnitude — of rate relief depends on how markets interpret the Fed’s next moves.
Global Calm, Local Opportunity: Trade Talks Ease Market Fears
Adding to the optimism, U.S.–China trade negotiators recently announced that they’ve laid the groundwork for a new trade deal ahead of a Trump–Xi meeting.
Markets reacted instantly: stocks jumped, commodities adjusted, and analysts hinted that reduced trade tensions could support global growth.
If these talks produce real results, it could further stabilize markets — giving the Fed more confidence to continue rate cuts without spooking investors.
Fannie Mae’s Forecast: Mortgage Rates to Fall in 2025
Meanwhile, Fannie Mae’s latest report offers a dose of good news:
It now expects the average 30-year mortgage rate to hover near 6.3% in 2025, lower than earlier forecasts.
That’s still higher than the record lows of the pandemic, but it’s a meaningful improvement — and it could reignite buying and refinancing activity across the housing market.
Fannie Mae’s research team also expects mortgage originations to reach nearly $1.9 trillion next year, signaling renewed borrower confidence.
What Borrowers Should Do Right Now
If you’ve been waiting on the sidelines, 2025 could be your window.
With rates expected to ease — and home prices stabilizing in many regions — borrowers who act early may capture better terms before the market fully reacts.
But be careful: lenders often adjust pricing ahead of the Fed’s official cuts, so timing is everything. That’s where working with a specialized lender can make all the difference.
How Mbanc Can Help You Get Ahead
At Mbanc, we understand that every borrower’s story is unique — especially those who don’t fit the traditional mold. As a Non-QM (non-qualified mortgage) lender, Mbanc offers flexible mortgage options designed for:
- Self-employed borrowers or gig-workers
- Investors using bank statements or DSCR loans
- Borrowers with complex income situations
- Homeowners looking to refinance before rates drop further
Our experienced loan officers can guide you step-by-step, helping you find the best loan structure before rates shift again.
Call an Mbanc loan officer today or
Apply online in minutes to secure your future mortgage before the next rate wave hits.
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Key Takeaways
- The Fed is likely to continue cutting rates in late 2025, despite inflation concerns.
- Trade tensions easing between the U.S. and China could support broader market confidence.
- Fannie Mae expects 2025 mortgage rates to average around 6.3%, fueling new home-buying and refinancing activity.
- Mbanc offers Non-QM solutions for borrowers who need flexibility — and can help you act before rate changes ripple through the market.
Sources:
https://www.housingwire.com/articles/fannie-mae-lowers-mortgage-rate-outlook-2025/
https://www.cnbc.com/2025/10/27/federal-reserve-interest-rate-cut-what-to-expect.html