T
he Federal Reserve cut its benchmark federal‑funds rate for the first time in nine months, lowering the target range by a quarter point to 4.00%‑4.25%. The move, largely anticipated, aims to soften borrowing costs that have weighed on households and firms. Chair Jerome Powell and 11 FOMC members approved the decision, but newly sworn‑in governor Stephen Miran—appointed by President Trump—voted against it, urging a half‑point cut instead.

    While the federal‑funds rate does not set consumer rates directly, it steers credit‑card APRs, auto and small‑business loans. Mortgage rates, more closely tied to Treasury yields and market conditions, have already eased. Freddie Mac reported the average 30‑year fixed rate at 6.13% on September 16, down from over 7% in January and near an 11‑month low. Fixed‑rate homeowners will not see lower payments unless they refinance or move, and housing economists warn that buyers should not expect a sharp decline in rates solely because of the Fed’s action. Most analysts predict rates will stay above 6% through year‑end.

    The policy shift spurred a quick market reaction: the S&P Homebuilders Select Industry Index rose more than 2%, reflecting optimism that cheaper financing could lift demand. Nonetheless, the future path of mortgage rates and the broader economy will depend more on how aggressively the Fed signals further easing in the coming months than on this single quarter‑point cut.