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# The Fed Paused Rate Cuts — What It Means for Mortgage Rates
- URL: https://www.mortgagemomradio.com/the-fed-paused-rate-cuts-what-it-means-for-mortgage-rates/
- Published: 2025-01-29T21:00:00.000Z
- Updated: 2026-09-04T17:11:28.000Z
- Description: The Fed held at 4.25–4.5% after three straight cuts, and the headlines made it about politics. Debbie watched the whole press conference: what Powell actually said, why March looks like another pause, and why mortgage rates improved on the very day the Fed didn't cut.
- Author: Deborah Marcoux
- Tags: Podcast, Mortgage Mom Radio, #episode-backfill

Mortgage Mom Radio • “Fed Pauses Rate Cuts!” • Live show from Wednesday, January 29, 2025 • 30 minutes • Hosted by Debbie Marcoux, NMLS #237926

The Federal Reserve held rates steady after three straight cuts — and the headlines immediately made it about politics. Debbie watched the entire press conference so you don't have to. In this episode, recorded the day of the Fed meeting, she reads the FOMC statement in full, separates what Chair Powell actually said from what the media wrote about it, and explains the part most people miss: mortgage rates don't follow the Fed funds rate — and they actually *improved* on the day of the pause.

## Key takeaways

- **The Fed held its target range at 4.25–4.5%** after three consecutive cuts, calling the labor market solid, inflation “somewhat elevated,” and current policy sufficiently restrictive — and signaled that several meetings could pass before the next cut. March looks unlikely.
- **Powell stayed strictly neutral.** Pressed repeatedly about President Trump's demand for immediate rate cuts, tariffs, and deportations, he refused to comment or speculate — “it's not appropriate for me to do so.” Debbie's read: the pause was about a strong economy, not politics, whatever the headlines imply.
- **Mortgage rates are not the Fed funds rate.** They trade daily like the stock market, moving with bonds, mortgage-backed securities, and Treasuries. When the Fed cut earlier, mortgage rates shot *up*; on this expected pause, they actually got *better*.
- **Rates at the time of the show:** conventional 30-year around 6.875–7%, FHA/VA around 6.5%, and non-QM products (bank statement, DSCR investor loans) from about 7.5% up to 8.5–9% — all depending on credit, property type, and down payment.
- **What restarts the cuts:** inflation convincingly heading to the 2% target, consumer spending cooling, or cracks in the job market (unemployment was 4.1%). The Fed's own projection was two cuts in 2025; Debbie's call, for what it's worth: three.
- **The rhythm to expect:** mortgage rates run down for a week or two, stall, bounce partway back, hold, then grind lower again. After worsening almost daily since October 2024's lows, they had just turned back down — good news for anyone purchasing or refinancing.

## Chapters

- 01:00Flying solo: first show without a producer
- 03:00The Fed pauses — what happened today
- 04:00The FOMC statement, read in full
- 06:00What “sufficiently restrictive” actually means
- 07:00Did Trump pressure the Fed? What Powell really said
- 09:00Tariffs, immigration, and the no-comment answers
- 10:00Headlines vs. the press conference
- 13:00No cut in March? Reading between the lines
- 16:30Why mortgage rates improved on a no-cut day
- 19:30Q&A: what has to happen for rates to fall after March
- 22:30Oil, energy prices, and consumer spending
- 24:00Q&A: where mortgage rates are right now

## Questions answered on this show

### “What would have to happen after March for interest rates to come down?”

The Fed said it expects only two cuts in 2025 and will move only when the data forces it: inflation convincingly cooling toward the 2% target, real trouble in the jobs market, or a faltering economy. Inflation comes down when spending comes down — consumers have been overspending, many tapped out on credit cards, and retailers won't cut prices until people stop buying. Some costs are out of a consumer's control (groceries, gas, power bills), and lower oil prices would help those directly. Debbie's own opinion, having watched this cycle play out before: 2024 delivered three cuts, and she expects 2025 will end up with three as well, not two.

### “What are mortgage rates currently?”

On average, about 7% — with the usual caveat that loan type, credit score, down payment, property type, and debt ratios all change the quote. A standard conventional 30-year fixed with a strong down payment was running about 6.875–7%; FHA and VA loans with good credit around 6.5%; and riskier products — bank statement programs, DSCR investor loans, lower credit scores, or recent mortgage lates — starting around 7.5% and ranging up to 8.5–9%.

## This week's numbers (week of January 29, 2025 — averages, not quotes)

- Fed funds target range: **4.25–4.5%**, held steady after three straight cuts
- Unemployment rate: **4.1%** — a labor market the Fed calls solid
- Inflation: still above the Fed's **2%** target
- Conventional 30-year fixed: about **6.875–7%**
- FHA / VA 30-year fixed: about **6.5%**
- Non-QM (bank statement, DSCR investor): about **7.5%**, up to 8.5–9% depending on the file

*Your rate depends on FICO score, property type, loan balance, and loan purpose. These are national conforming averages for context, not a quote.*

### Wondering what the Fed's pause means for your loan?

Call [844-935-3634](tel:8449353634) (844-WE-LEND-4), [start an application](https://www.mortgagemomradio.com/apply/), or run your numbers with the [mortgage calculators](https://www.mortgagemomradio.com/tools/). Get the weekly rate rundown in the [newsletter](https://www.mortgagemomradio.com/newsletter/).

Full transcript (lightly edited for clarity) 

*Auto-generated captions cleaned for readability. Commercial breaks and repeated housekeeping have been trimmed; licensing information appears at the bottom of this page.*

### Flying solo

Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, the Mortgage Mom — and this is the first show I've ever run entirely by myself. Mikey is here to guide me one last time; he's beginning a new career as an EMT, which I am so proud of him for, but he won't be with me next week, so I've got to learn all of this equipment on my own. New computer, new setup, and me — here we go. If the sound is off, let me know in the chat.

### The Fed pauses — what happened today

The Federal Reserve had their meeting today, and they did not cut interest rates — they paused. As a matter of fact, they made it sound like a couple of meetings might go by before we see another cut. Many people are blaming President Trump for the pause, and we're going to talk about that. But first, the source material: I'm going to read you the press release, then tell you what I observed watching the actual press conference, and then we'll look at how the media wrote it up.

### The FOMC statement, read in full

From the Federal Reserve's release: recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run, and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4.25 to 4.5%. In considering the extent and timing of additional adjustments, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. It is strongly committed to supporting maximum employment and returning inflation to its 2% objective, and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge — taking into account labor market conditions, inflation pressures and expectations, and financial and international developments.

In plain English: they believe the job market is strong, inflation is still too high, and the economy isn't cooling the way they'd previously anticipated. They consider the current Fed funds rate sufficiently restrictive — meaning it's positioned to keep slowing spending and inflation — and they think the economy is strong enough to handle rates at these levels without another cut.

### Did Trump pressure the Fed? What Powell really said

Now, the Trump question. I sat and watched the entire press conference, and many of the questions circled him. The president has said he wants interest rates reduced, basically immediately — we all know how he talks — and the press kept asking whether the Fed would respond to that. The Fed stayed very strong, very neutral, and very tight-lipped: no comment on suggestions from any person of any political party, including the president.

This is something I've covered on past shows — including one right before the election on rate environments under different presidents — the Federal Reserve is a neutral entity. It does not take direction from any individual. Do I think there's still some politics in there somewhere? That's human nature. But on paper, in black and white, they are a neutral party making decisions based on what's best for the economy.

They came at Chair Powell with questions about tariffs — whether tariffs on goods would increase inflation. Tight-lipped, no answer. They asked about deportations and whether removing workers would strain the job market. Again: no comment, he said, because he can't speak to speculation about things that haven't happened. He did not answer a single hypothetical, and honestly, that's what he should do.

### Headlines vs. the press conference

Then you go to Yahoo Finance and the headline reads: “Cautious Fed holds rates steady with Trump unknowns looming over outlook.” What you're seeing in the media is not necessarily what happened in the room. Being fair to Mr. Powell, he did not say a single word suggesting politics drove the decision. What he said was that the economy is strong, unemployment is low at 4.1%, people are still buying goods, and cutting the rate doesn't make sense right now.

The article did make one fair point, and I'll read it: “I'm not going to have any response or comment whatsoever on what the president said,” Powell told reporters Wednesday after the Fed held rates steady following three straight cuts. “It's not appropriate for me to do so.” But it was clear from his comments that several unknowns about the new administration's economic policies could affect future Fed policy, forcing the central bank to remain cautious. That part I agree with: the Fed can't make decisions about the future without knowing how the changes being made right now will affect the economy, inflation, and jobs. So form your own opinion about the administration's policies — but what you read and see in the media is not always what was actually said.

### No cut in March?

The other thing I took from the press conference: it doesn't look like there's a rate cut coming in March. Now, we've been told before that no cut was coming and then — boom — there was one, and we've been told rates wouldn't rise and they rose anyway. Six weeks is a long time: jobs reports, inflation reports, a lot of moving parts between now and the next meeting. But as of today, March looks like a pause too. At their last meeting they projected only two cuts for 2025\. My own opinion — and I said for a long time that cuts wouldn't start until the fourth quarter of 2024, which is exactly what happened — is that we'll actually see three cuts this year, just like we got three in 2024\. That's just my read, from doing this as long as I have.

### Why mortgage rates improved on a no-cut day

Here's the bright light, and I've said this before: mortgage rates have nothing to do with the Federal Reserve's rate directly. Mortgage rates are based on notes, bonds, mortgage-backed securities, Treasuries — we're very much like the stock market, moving up and down daily depending on where money is flowing. Remember when the Fed was cutting and mortgage rates shot through the roof? Doesn't make sense, right? Today is the mirror image: the expectation was no cut, we got no cut, and mortgage rates actually improved.

Honestly, since October 2024 — the best rates we'd had in about two and a half to three years — mortgage rates got worse almost daily. But over the last couple of weeks, with the market anticipating this pause, rates have started getting better, and today's announcement helped again. This is the pattern: a nice run down for a week or two, then a stall, then a partial bounce back up — never quite as high as before — then a hold, then slowly down again. Right now we're in the coming-down stretch, which is fabulous news for anybody looking at a mortgage, a refinance, or a purchase. Rates are better today than a week ago, and better than the week before that.

### Q&A: what has to happen for rates to fall after March

A viewer asks: *“What should the conditions be after March for interest rates to come down?”*

The Fed will cut only when they see either inflation cooling with certainty toward that 2% level, serious unemployment, or genuine trouble in the economy. As long as they believe the economy and the job market can sustain this restrictive funds rate, they'll cut only when absolutely necessary. So very few cuts in 2025 is possible — they say two; I think we'll see three.

How does inflation actually come down? Prices of goods and services have to come down, and that happens when spending comes down. Consumers in this country have been spending absolutely crazy amounts of money — that's why so many people are tapped out on credit cards. Some things you can't control: groceries, gas at the pump, your power bill — and we all know the power bills have been insane. A lot of that is oil-driven; if oil production rises the way the administration promises — “drill baby drill” — the per-barrel price should come down, which should bring home energy and pump prices with it. And here's a quirk worth knowing: pull up the old charts, and although they're not directly connected, when oil falls, mortgage rates very often follow. Beyond that, what we can control as consumers is spending: buy what you need, not what you want, or this stays a vicious cycle.

### Q&A: where mortgage rates are right now

Another viewer asks what rates are currently. On average, about 7% — but it depends on the loan type, credit score, down payment, and property type; so many things go into a quote that nothing can be promised sight unseen. A standard conventional 30-year fixed with a strong down payment is running about 6.875 to 7%. A government loan — FHA or VA — assuming great credit and clean debt ratios, about 6.5%. Once you get into riskier territory — non-qualified mortgages like bank statement programs, debt-service-coverage investor loans, lower credit scores, or mortgage lates — you're starting around 7.5% and can range up to 8.5 or 9%.

### Wrap-up

Today was a show about the Federal Reserve: what was said, what the press conference actually contained, and my opinion of what I read between the lines. The goal of this show is to keep you informed and educate you — that's all I do this for. I think I did pretty darn good running the show myself — you didn't even get any commercials. I'm here every Wednesday at 1 PM Pacific with a new topic. If you want to know when I go live, text the word LIVE to 844-935-3634 — that's 844-WE-LEND-4, the same number to reach my office — or go to mortgagemomradio.com and send me a message; it comes to me and I will respond. Have a great rest of your day, and I'll talk to you all real soon.

Debbie Marcoux is licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, NMLS ID #237926, and additionally licensed in AZ (0941504), FL, GA, HI, ID, IL, NV, NC, OR, TN, TX, and WA. Rates and figures discussed were current as of the air date of January 29, 2025, reflect national conforming averages, and are not an offer of credit or a rate quote. Debbie Marcoux is not a financial advisor; consult qualified professionals about your individual situation.