The Fed cut the federal funds rate by 25 basis points (0.25%) on October 29, marking its second cut this year, a sign that progress on inflation and cooling labor data are starting to shift policy.

But here’s the key message for today’s market — this isn’t a “rates are plunging” moment; it’s a “steady improvement” moment.

The Mortgage Bankers Association noted that the move met expectations, but there were two dissenting votes: one favoring a larger cut, and one opposing any cut, along with concerns about ongoing economic uncertainty and a Federal Reserve that still perceives risks on both sides.

MBA expects two more modest cuts  — one in December and one in early 2026 — and highlighted the end of quantitative tightening in December. It’s another signal that the Fed is trying to support stability, not ignite a surge.

So what does this mean for clients?

Mortgage rates didn’t suddenly fall.
Rates were already trending lower over the past weeks, and according to MBA, this cut alone isn’t expected to move them dramatically. Mortgage rates respond to the bond market, inflation data, and economic sentiment, not simply the Fed’s announcement.

Affordability is improving slowly, not suddenly.
Progress is happening, but the climb back to easier affordability is gradual. Buyers still need to budget carefully and expect fluctuation.

Refi talk is emerging — not exploding.
Some homeowners are back in the conversation, especially those who bought near peak rates. Refinances are emerging selectively, not broadly.

Strategy wins in this stage of the cycle.
We are in an environment where being prepared matters more than being early. Updated pre-approvals, clear payment expectations, and ongoing check-ins with clients will matter more than rate headlines.

The bottom line? This cut is directional progress, not a dramatic turning point. Confidence will build slowly. 

If you don’t have a Key Mortgage loan officer yet, connect with us today — in a market like this, buyers benefit from guidance grounded in data, not headlines.