What It Won't Mean To Your Mortgage Rate If The Fed Lowers The Fed Funds Rate

I have fielded three separate questions from clients on the topic so that must mean it's time to address the issue in public. The Fed does not control mortgage rates. The Fed controls the Fed Funds Rate. The chart above from HSH Associates shows the path of the Fed Funds Rate (in brown) against a few mortgage products since June 2004. If there was a direct connection between FFR and mortgage rates, the chart wouldn't show the brown line playing...