Does the Federal Reserve Directly Effect Mortgage Interest Rates?


Animas Mountain Mortgage

The Federal reserve has a dual mandate of keeping inflation in check and keeping the economy growing. When the Federal Reserve increases interest rates it is increasing the Federal Funds Rate & the Federal Discount Rate – both of which are very short term interest rates. This will help stabilize the economy depending on the current situation. Long term interest rates increase or decrease based on supply and demand which is effected by the state of the economy. So the answer is that No the Federal Reserve does not directly impact Mortgage Interest Rates, however they do indirectly effect Mortgage Interest Rates. Click here for my video

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