The Fed cut interest rates 1/4 point on October 29, 2025.
This was another expected cut after a 1/4 point cut in the September 2025 Federal Reserve meeting, which followed a continued pause beginning at the January 2025 Federal Reserve meeting, and remaining paused in the March 2025 Federal Reserve meeting , the May 2025 Federal Reserve meeting and June 2025 Federal Reserve meeting. Prior to that there were three drops – a 1/4 point drop in both the December 2024 Federal Reserve meeting and in the November 2024 Federal Reserve meeting and a 1/2 point drop in the September 2024 Federal Reserve meeting, which happened after continued pauses in March 2024, May 2024 and June 2024 Federal Reserve meetings. Prior to those pauses, we had seen rates rise for awhile.
The Federal Reserve indicated back in December 2024 that it planned to hold rates steady in the future, since inflation remained above their 2% goal at the time. At that time, the Fed hoped to have two rate cuts in 2025, which was down from the four rate cuts they had outlined in their September 2024 meeting. They stated in the 6/18/2025 meeting that they still hoped to have two rate cuts in 2025. Today’s was the second of those two. Some economists expect there may be another rate cut in the December 2025 meeting.
With the Government shut down, the Federal Reserve does not have hard numbers on jobs or inflation. Inflation had risen to 2.9% from 2.3% in August. The goal is 2%. In the June 18, 2025 meeting, the Federal Reserve raised its 2025 inflation forecast from 2.1% in April to 3% by the end of the year. Weak job reports in July and August brought about the last interest rate drop despite rising inflation.
Thank you to USA Today for their live coverage of the Fed meeting.
When it comes to mortgage interest rates, they are determined by many factors. The Fed’s decisions on interest rate hikes or cuts can be one of those factors, but it is generally a small part. Lenders that I work with say that mortgage companies generally anticipate when the Fed will raise or drop rates, so mortgage rates and terms usually already reflect any potential upcoming pause, hike or cut prior to an official Fed meeting announcement. Much of the industry expected a drop in rates by the Fed at the 10/29 meeting.
If you are considering buying a home in Timonium, Towson, and the Greater Baltimore area, please contact me. I could connect you with a local trusted mortgage professional who can help to guide you through your mortgage options as your buy your new Baltimore home with me!
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