After what stock investing and market research firm the Motley Fool went so far as to call a market “crash” over concerns regarding President Trump’s tariffs and a possible recession, traders and analysts are expecting more rate cuts could come from the Federal Reserve Board this year.
That could mean perhaps even up to five rate cuts, as reported by Investing.com. The President’s tariffs could bring on “an all-out trade war and a new inflationary pulse …” and “Citi analysts continue to believe a softer labor market will sway the Federal Reserve to deliver five rate cuts this year,” the financial portal and news outlet reported.
It would certainly mark a significant shift in policy by the Fed, which in January indicated it was in no particular hurry to cut rates and would likely make one or two such snips this year. Fed Chairman Jerome Powell has specifically reiterated the Fed will follow a cautious approach, barring extreme economic need.
Now, the chance there’ll be five Fed cuts of 25 basis points has leapt to nearly 38% — or a little better than one out of three — CNBC contended on Friday, April 4, citing data from the CME Group, a global derivatives marketplace. Should such a quintet of cuts come to pass, the federal funds rate would then be 3.00% to 3.25%, down from the 4.25% to 4.50% where it has been since December last year.
Economists generally expect mortgage rates to fall when the Fed cuts rates, though that is not for certain — and how much, exactly, mortgage rates will come down, if they do, is also unknown. However, mortgage rates have begun to dip following these news reports.
According to Optimal Blue’s Mortgage Rate Indices, the 30-year conforming mortgage rate as Monday, April 7 is averaging 6.481%, the 15-year conforming mortgage is averaging 5.561%, and the 30-year FHA [Federal Housing Administration] mortgage is averaging 6.231%.
For reference, here’s the 30-year fixed-rate mortgage’s (FRM) rate trend from the week ending April 3, 2025, and going back through the start of the year, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS). Note that Freddie Mac’s PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
Freddie Mac’s survey found the 30-year FRM rate averaged:
- 6.64% as of April 3, 2025;
- 6.65% as of March 27, 2025;
- 6.67% as of March 20, 2025;
- 6.65% as of March 13, 2025;
- 6.63% as of March 6, 2025;
- 6.76% as of Feb. 27, 2025;
- 6.85% as of Feb. 20, 2025;
- 6.87% as of Feb. 13, 2025;
- 6.89% as of Feb. 6, 2025;
- 6.95% as of Jan. 30, 2025;
- 6.96% as of Jan. 23, 2025;
- 7.04% as of Jan. 16, 2025;
- 6.93% as of Jan. 9, 2025; and
- 6.91% as of Jan. 2, 2025.
The PMMS found the 15-year FRM rate averaged:
- 5.82% as of April 3, 2025;
- 5.89% as of March 27, 2025;
- 5.83% as of March 20, 2025;
- 5.80% as of March 13, 2025;
- 5.79% as of March 6, 2025;
- 5.94% as of Feb. 27, 2025;
- 6.04% as of Feb. 20, 2025;
- 6.09% as of Feb. 13, 2025;
- 6.05% as of Feb. 6, 2025;
- 6.12% as of Jan. 30, 2025;
- 6.16% as of Jan. 23, 2025;
- 6.27% as of Jan. 16, 2025;
- 6.14% as of Jan. 9, 2025; and
- 6.13% as of Jan. 2, 2025..
