The Federal Reserve cut interest rates by 0.25% on November 7. More interest rate cuts are likely through the end of 2026.

The Federal Reserve cut its key interest rate by a quarter-point in response to a steady decline in once-high inflation that angered Americans and helped drive Trump’s election victory.

Mortgage rates, in particular, surged last year to their highest level since 2000 but have since come down alongside inflation. But it's been a bumpy ride back to the bottom in recent weeks. What, then, does this latest Fed rate cut mean for mortgage interest rates? That's what we'll break down below.

In a move that consumers will welcome, the Federal Reserve on Thursday slashed its benchmark interest rate by a quarter of a percentage point to 4.5-4.75%— marking the second reduction this year. The Federal Reserve implemented a series of interest rate hikes in 2022 and 2023 to combat high inflation — which peaked at 9% in the middle of 2022.

Wholesale prices in the US rose last month, remaining low but suggesting that the American economy has yet to completely vanquish inflationary pressure. Thursday’s report from the Labor Department showed that its producer price index — which tracks inflation before it hits consumers — rose 0.