The Federal Reserve raised rates by a quarter percentage point at its Sept. 15-16 meeting, lifting the target range for the federal funds rate to 3.75% to 4%.
The vote was unanimous, 12-0. It was the first increase since July 2023.
But that doesn't mean mortgage rates will go up.
History shows that Fed announcements aren't the best bellwethers for the direction of fixed mortgage rates. In the first weekly reading after previous hikes, mortgage rates have generally moved very little. They have also sometimes fallen in the months that followed.
What Happened To Mortgage Rates After Previous Fed Hikes?
Here's what happened to Freddie Mac's 30-year fixed mortgage rate after each of the 20 Fed rate hikes that preceded the September 2026 increase.
Changes are in percentage points. Positive numbers mean mortgage rates rose. Negative numbers mean they fell.
| Fed Hike |
Hike Size |
Mortgage Rate Before |
1 Week Later |
4 Weeks Later |
8 Weeks Later |
12 Weeks Later |
| Dec. 16, 2015 |
25 bps |
3.95% |
+0.02 |
+0.02 |
-0.23 |
-0.31 |
| Dec. 14, 2016 |
25 bps |
4.13% |
+0.03 |
+0.07 |
+0.06 |
-0.03 |
| March 15, 2017 |
25 bps |
4.21% |
+0.09 |
-0.11 |
-0.19 |
-0.27 |
| June 14, 2017 |
25 bps |
3.89% |
+0.02 |
+0.07 |
+0.04 |
-0.07 |
| Dec. 13, 2017 |
25 bps |
3.94% |
-0.01 |
+0.01 |
+0.28 |
+0.49 |
| March 21, 2018 |
25 bps |
4.44% |
+0.01 |
-0.02 |
+0.11 |
+0.10 |
| June 13, 2018 |
25 bps |
4.54% |
+0.08 |
-0.02 |
+0.06 |
-0.02 |
| Sept. 26, 2018 |
25 bps |
4.65% |
+0.07 |
+0.20 |
+0.29 |
-0.02 |
| Dec. 19, 2018 |
25 bps |
4.63% |
-0.01 |
-0.18 |
-0.22 |
-0.22 |
| March 16, 2022 |
25 bps |
3.85% |
+0.31 |
+0.87 |
+1.42 |
+1.24 |
| May 4, 2022 |
50 bps |
5.10% |
+0.17 |
0.00 |
+0.71 |
+0.44 |
| June 15, 2022 |
75 bps |
5.23% |
+0.55 |
+0.07 |
-0.24 |
+0.43 |
| July 27, 2022 |
75 bps |
5.54% |
-0.24 |
-0.41 |
+0.48 |
+1.38 |
| Sept. 21, 2022 |
75 bps |
6.02% |
+0.27 |
+0.90 |
+1.06 |
+0.31 |
| Nov. 2, 2022 |
75 bps |
7.08% |
-0.13 |
-0.50* |
-0.81 |
-0.93 |
| Dec. 14, 2022 |
50 bps |
6.33% |
-0.02 |
+0.15 |
-0.24 |
+0.32 |
| Feb. 1, 2023 |
25 bps |
6.13% |
-0.04 |
+0.37 |
+0.29 |
+0.26 |
| March 22, 2023 |
25 bps |
6.60% |
-0.18 |
-0.33 |
-0.25 |
+0.11 |
| May 3, 2023 |
25 bps |
6.43% |
-0.04 |
+0.14 |
+0.24 |
+0.35 |
| July 26, 2023 |
25 bps |
6.78% |
+0.03 |
+0.31 |
+0.40 |
+0.79 |
| Median |
— |
— |
+0.02 |
+0.05 |
+0.09 |
+0.19 |
Source: Freddie Mac Primary Mortgage Market Survey, retrieved via FRED. "Mortgage Rate Before" is the last weekly PMMS reading published before each Fed decision. Later columns measure the change from that reading. Changes are expressed in percentage points. Medians for this 20-observation sample are the midpoint of the two middle values and are rounded to the nearest hundredth.
What The Record Actually Shows
For the most part, a Fed rate hike doesn't cause an immediate shift inmortgage rates.
The median one-week change across all 20 hikes is just 0.02%. In 13 of the 20 cases, the rate moved less than 0.10% in either direction. In 8 of the 20, rates actually fell.
Keep in mind that more than half of the hikes in this table occurred during 2022-2023 when the Fed was responding to the inflation surge that followed the COVID-19 pandemic.
Consumer pricesrose 9.1% year over year in June 2022, the largest 12-month increase since November 1981.
The Fed responded with unusually large moves. It raised rates by 75 basis points at four consecutive meetings from June through November 2022, compared with the more typical quarter-point increases.
Mortgage and Treasury markets during that period were reacting to much more than each individual Fed announcement. Investors were rapidly repricing inflation, the expected path of monetary policy, economic growth and the transition away from the exceptionally accommodative policies used during the pandemic.
Even with those exceptional episodes included, a Fed hike has rarely been followed by a large immediate move in Freddie Mac's weekly mortgage-rate average.
There's a much more mixed picture in the long run. Twelve weeks after a hike, the 30-year rate was lower than its pre-hike level in 8 of the 20 cases and higher in 12, although that also includes the unusual pandemic rate hiking cycle.
The range of mortgage rates 12 weeks after a rate hike is dramatic, ranging from 0.93% lower to 1.38% higher.
Why Mortgage Rates Can Move Before The Fed Does
Financial markets don't wait for the Fed's announcement to begin reacting.
Investors continuously incorporate inflation reports, employment data, economic growth, Treasury issuance and Fed communications into their expectations. If a rate hike becomes increasingly likely, Treasury yields and other market interest rates can adjust well before policymakers actually vote.
Look at the weeks leading into the September 2026 meeting. The 10-year Treasury yield closed at 4.79% on Sept. 1 and reached 5.00% by Sept. 15, the day before the decision.
The December 2016 hike is another example of markets pricing in a Fed move before it happens. Freddie Mac's 30-year mortgage rate rose about 0.66% during the eight weeks before the Fed increased rates. In the week after the hike, it rose only another 0.03%.
The bulk of that adjustment happened before the meeting.
This is why the surprise relative to market expectations can matter more than the mechanical act of raising, cutting or holding the federal funds rate. A decision investors already expect may generate little reaction. New guidance or economic projections that change expectations about what happens next can move longer-term rates much more.
What Interest Rate Does The Federal Reserve Actually Control?
The Federal Reserve does not set mortgage rates.
The Federal Open Market Committee sets a target range for the federal funds rate, which is an overnight interest rate between depository institutions. The Fed's target range influences borrowing costs throughout the economy, but its most direct effects are generally on shorter-term and variable rates.
That can include HELOCs and other variable-rate products tied to the prime rate. Variable credit card rates can also respond relatively quickly.
Adjustable-rate mortgages may be affected when they reach an adjustment date, depending on the loan's index, margin and rate caps.
A fixed-rate mortgage works differently. Once your 30-year fixed mortgage is originated, its rate does not reset whenever the Fed changes monetary policy. Rates available on new fixed mortgages are driven primarily by longer-term capital markets.
How 30-Year Fixed Mortgage Rates Are Really Determined
Thirty-year mortgage rates tend to move with the 10-year Treasury yield, with an additional mortgage spread.
Mortgages are funded and traded through mortgage-backed securities, and the rate you are offered also depends on factors such as credit, loan type, loan-to-value ratio and points.
But the 10-year Treasury provides a useful benchmark for understanding broad mortgage-rate movements.
Its rise during 2026 also helps explain why fixed mortgage rates can remain elevated regardless of what happens to the Fed's overnight policy rate.
Why Mortgages Track The 10-Year Treasury
A 30-year mortgage has a 30-year contractual term, but many mortgages do not remain outstanding for three decades. Borrowers sell homes, refinance loans or otherwise repay their mortgages early.
That prepayment behavior makes the expected life of a pool of mortgages considerably shorter than its stated maturity. As a result, mortgage-backed securities often trade in relation to intermediate- and long-term Treasury yields, with the 10-year Treasury commonly used as a benchmark for fixed mortgage rates.
What Is The Mortgage Spread?
Mortgage rates normally sit above Treasury yields. That difference is commonly called the mortgage spread.
The spread reflects several factors, including prepayment risk, market volatility, investor demand for mortgage-backed securities and costs involved in originating and servicing mortgages.
Using the latest PMMS reading available before the Sept. 16 decision and the Sept. 15 Treasury close produces a rough pre-meeting spread of 1.76%. Freddie Mac's 30-year average was 6.76% for the week ending Sept. 10, while the 10-year Treasury closed at 5.00% on Sept. 15.
The figures are not from the same day, so the calculation should be treated as an event-date comparison rather than a precise contemporaneous spread. The 10-year Treasury closed at 4.95% on Sept. 10, the publication date of the latest PMMS reading.
Applying the same pre-meeting method to the nine Fed hikes from 2015 through 2018, using the last available PMMS reading before each decision and the 10-year Treasury close on the day before it, produces spreads ranging from roughly 1.54% to 1.81%.
By that event-date comparison, the latest spread was within the range surrounding the 2015-2018 hikes, though near the upper end. The 10-year Treasury itself is now a larger part of the story. Its yield rose from 3.97% on Feb. 27, its low for the year, to 5.00% on Sept. 15. That's an increase of more than a full percentage point.
Even if the mortgage spread narrows, a substantially higher Treasury yield can keep fixed mortgage rates elevated.
Why Mortgage Rates Sometimes Rise Sharply After A Fed Hike
The historical record does include periods when mortgage rates climbed substantially after a Fed increase. Those episodes also show why the Fed decision should not be viewed in isolation.
March 2022
Mortgage rates rose 1.42% over the eight weeks following the Fed's March 2022 increase, the largest post-hike move in the table.
But March 2022 marked the beginning of an exceptional tightening cycle aimed at bringing down the post-pandemic inflation surge. Inflation was already far above the Fed's 2% goal. The Fed cited pandemic-related supply and demand imbalances, higher energy prices and broader price pressures as it began raising rates.
Inflation continued accelerating after the first hike. CPI reached 9.1% year over year in June 2022, its highest reading since 1981.
Markets were therefore rapidly repricing the entire expected path of monetary policy, not simply reacting to the initial quarter-point hike. The Fed raised rates by 50 basis points in May, then by 75 basis points at four consecutive meetings from June through November. It was also shrinking its balance sheet while long-term Treasury yields moved sharply higher.
The quarter-point March increase was only one part of a much larger adjustment in monetary policy and the bond market.
July 2023
The July 2023 hike was followed by a 0.79% increase in the 30-year mortgage rate over the next 12 weeks. That hike ultimately became the last increase of that tightening cycle.
Longer-term Treasury yields continued climbing during the following months as investors absorbed heavier Treasury issuance and reassessed how long interest rates might remain elevated.
November 2022
The opposite case is also instructive. The Fed raised rates by 75 basis points on Nov. 2, 2022, one of its largest increases in decades. The PMMS reading 12 weeks later was 0.93% lower.
That comparison crosses Freddie Mac's November 2022 PMMS methodology change, so it should not be treated as a strictly like-for-like measurement. Still, the broader market direction was clear. Cooler inflation data coincided with falling long-term Treasury yields and lower mortgage rates even as the Fed continued raising short-term rates.
December 2017
Mortgage rates were 0.49% higher 12 weeks after the December 2017 hike. Long-term Treasury yields also rose during the period as investors reassessed economic growth and the effects of recently enacted tax legislation.
Across these episodes, large mortgage-rate moves coincided with broader changes in long-term bond yields and mortgage markets rather than simply matching the size of the Fed's increase.
What Actually Moves Mortgage Rates?
If you are trying to understand where mortgage rates could go next, several factors deserve more attention than a single Fed meeting.
Inflation
Inflation affects the return investors require to lend money for long periods. Unexpected changes in inflation can move Treasury yields quickly, particularly when they alter expectations about future Fed policy or the purchasing power of future interest payments.
Two major reports to watch are the Consumer Price Index and the Personal Consumption Expenditures price index.
Employment And Economic Growth
A strong labor market and resilient economic growth can keep long-term yields elevated if investors expect higher real interest rates or tighter monetary policy to persist.
Weakening employment or economic growth can put downward pressure on long-term yields, although the effect also depends on inflation and other market conditions.
Treasury Supply And Investor Demand
The federal government regularly issues Treasury securities to finance deficits and refinance maturing debt. Changes in how much long-term debt investors must absorb can affect yields, particularly when demand does not rise at the same pace as supply.
The Fed's Balance Sheet
The Fed affects mortgage markets through more than its overnight policy rate. The composition of its holdings of Treasury securities and agency mortgage-backed securities also matters for mortgage markets.
The September 2026 directive continued the Fed's policy of reinvesting principal payments from agency securities into Treasury bills rather than mortgage-backed securities. Its MBS portfolio can therefore continue shrinking as those securities mature or borrowers make principal payments, leaving private investors to absorb more of the mortgage market.
Changes in those holdings are reported through the Fed's H.4.1 balance sheet release.
Interest Rate Volatility And Mortgage-Backed Security Demand
Mortgage investors face prepayment risk because borrowers can refinance or sell their homes before the loan reaches maturity. When interest rates become more volatile, predicting those cash flows becomes more difficult.
Investors may demand additional compensation for that uncertainty, which can widen the spread between mortgage rates and Treasury yields. When volatility declines and demand for mortgage-backed securities improves, the spread can narrow.
Why Are Treasury Yields Rising Now?
Treasury yields have been on the rise recently. Investors are weighing inflation risks, resilient economic growth, heavy government borrowing and uncertainty about how long interest rates may need to remain elevated.
Geopolitical developments have added another source of pressure. George Cole, head of European rates strategy for Goldman Sachs Research, points to the renewed rise in energy prices following the war in Iran as one factor behind the most recent volatility in global bond markets.
Higher oil and gas costs can complicate the inflation outlook and affect expectations for how central banks will respond.
But the increase in yields started well before the latest energy shock.
Cole also points to large government deficits, increased bond issuance, resilient economic growth and growing competition for investor capital as companies borrow heavily to finance AI investment. Governments and private borrowers are competing for the same pool of global savings, which can put upward pressure on interest rates.
Investors generally demand higher yields when inflation risks, government borrowing or uncertainty about future economic conditions increase.
If the 10-year Treasury rises as a result, fixed mortgage rates can rise with it even without a corresponding increase in the federal funds rate.
What Does A Fed Rate Hike Mean For You?
If Your Mortgage Rate Is Already Locked
A valid mortgage rate lock generally protects the agreed rate through the lock period, subject to its terms and any changes to your loan that could affect pricing. A Fed announcement does not automatically change an existing rate lock.
If You Are Shopping For A Mortgage
A Fed hike does not mean lenders will automatically raise 30-year fixed mortgage rates by the same amount. Bond and mortgage markets may have already adjusted before the meeting.
Your actual quote will also depend on the lender, loan program, credit profile, down payment, points and other pricing factors.
If You Have A HELOC
A Fed rate increase can have a more direct effect on a variable-rate HELOC. Many HELOC rates are based on an index such as the prime rate plus a lender margin. If the index rises, your HELOC rate and payment may also rise according to the terms of the loan.
If You Have An Adjustable-Rate Mortgage
A Fed hike does not necessarily change an ARM immediately. The rate generally changes only on scheduled adjustment dates using the index and margin specified in the mortgage, subject to applicable rate caps.
If You Are Waiting To Refinance
The federal funds rate alone is not a reliable signal for when fixed mortgage rates will fall. The 10-year Treasury yield and mortgage-market spreads provide a better picture of the forces influencing prevailing fixed rates.
What To Watch Instead Of Just The Fed
Borrowers who follow mortgage rates should watch more than meeting-day headlines.
The 10-year Treasury yield is one of the simplest benchmarks to follow. 2026 has shown why. The yield rose from 3.97% in late February to 5.00% by Sept. 15 even though the federal funds rate had not increased during that period.
Beyond Treasury yields, important releases include monthly CPI data, the Personal Consumption Expenditures price index and the monthly employment report.
Treasury financing announcements can also affect expectations about the amount and maturity of government debt coming to market. Freddie Mac's PMMS, published each Thursday, provides a consistent weekly benchmark for mortgage rates.
These indicators can move in different directions. That is why mortgage rates can rise while the Fed cuts rates or fall while the Fed is raising them.
The Bottom Line
A Fed rate hike does not automatically mean fixed mortgage rates will increase.
Across the 20 Fed hikes that preceded the September 2026 increase, the median change in Freddie Mac's 30-year mortgage rate one week later was just 0.02%. In 8 of those 20 cases, the rate fell.
Three months out, the results were mixed. Rates were lower in 8 of 20 cases and higher in 12, with outcomes ranging from 0.93% lower to 1.38% higher.
The 2022-2023 cycle also makes clear why those numbers need context. The Fed was responding to an exceptional post-pandemic inflation shock and at times raising rates by 75 basis points per meeting. Mortgage markets during that period were repricing the entire inflation and monetary-policy outlook, not simply reacting to individual hikes.
The recent Treasury market tells the same broader story. The 10-year Treasury climbed from 4.79% on Sept. 1 to 5.00% on Sept. 15, and it is now more than a full percentage point above its February low. Those moves took place before the Fed's September decision.
The reason is structural. The Fed directly targets a short-term overnight interest rate. Fixed mortgage rates depend more heavily on long-term Treasury yields, mortgage-backed securities markets and expectations about inflation, economic growth and future interest rates.
If you are tracking where fixed mortgage rates may go next, the 10-year Treasury is usually a better place to start than the federal funds rate alone.
Frequently Asked Questions
Does The Fed Set Mortgage Rates?
No. The Federal Reserve sets a target range for the federal funds rate, an overnight interest rate. Mortgage rates are determined in capital markets and are influenced by Treasury yields, mortgage-backed securities pricing and borrower- and loan-specific factors.
Will Mortgage Rates Go Up If The Fed Raises Rates?
Not necessarily, and historically they have rarely moved sharply in the first weekly reading after a hike. Across the 20 Fed rate hikes that preceded the September 2026 increase, the median change in the 30-year fixed mortgage rate one week later was only 0.02%. In 13 of the 20 cases, the move was smaller than 0.10% in either direction.
Over longer periods, results vary widely. Twelve weeks after a hike, mortgage rates were lower than their pre-hike level in 8 of the 20 episodes and higher in 12.
Why Are Mortgage Rates Connected To The 10-Year Treasury?
Although a typical fixed mortgage may have a 30-year contractual term, borrowers often sell, refinance or repay their loans before 30 years have passed. That shorter expected life helps make intermediate- and long-term Treasury yields, particularly the 10-year yield, useful benchmarks for mortgage-backed securities and fixed mortgage rates.
If The Fed Cuts Rates, Will Mortgage Rates Fall?
Not necessarily. In the second half of 2024, the Fed lowered its target range by a total of 100 basis points from September through December. Freddie Mac's 30-year mortgage rate nevertheless rose from 6.08% on Sept. 26 to 6.85% on Dec. 26 as long-term bond yields increased.
A Fed cut can contribute to lower mortgage rates if long-term yields also fall, but the two do not have to move together.
Should I Lock My Mortgage Rate Before A Fed Meeting?
Historical Fed meetings do not provide a reliable rule for whether locking immediately before or after a meeting will produce a lower mortgage rate. Markets frequently adjust in advance, while unexpected economic news can move rates in either direction.
A rate-lock decision should account for your closing timeline, current pricing, the terms and cost of the lock and your ability to tolerate a potential increase in rates.
What Is The Best Number To Watch For Mortgage Rates?
The 10-year Treasury yield is one of the most useful public benchmarks for tracking the direction of fixed mortgage rates. It does not determine the exact rate you receive, but broad movements in the 10-year Treasury and mortgage rates are closely connected.
.jpg?quality=80&width=150)
.jpg?quality=80&width=800)
.jpg?quality=80&width=800)
.jpg?quality=80&width=800)
