Fed Cut Week: Rates Hit 2025 Lows

A big milestone for the rate environment: interest rates just hit their best levels of 2025 as the bond market digests a lighter-than-expected Core PCE reading. In this week’s Master the Markets, host and expert Bill Bodnar breaks down why September’s Core PCE — running at 2.8% year over year, edging closer to the Fed’s 2% target — matters so much heading into this week’s Fed meeting. 
The Fed is widely expected to cut rates, but the real market mover will be the updated Summary of Economic Projections (SEP). Back in September, the Fed projected Core PCE to finish the year at 3.1% — but based on current trends, it may not even carry a “3-handle.” Bill explains how this shift, along with new economic growth forecasts, will shape bond yields and mortgage-backed securities.

Layer in a heavy slate of Treasury auctions, particularly the 10-year note and 30-year bond, and this becomes a pivotal week for mortgage pricing. With rates sitting at their lowest levels of the year and the 10-year hovering near the crucial 4% line, even small surprises could move markets quickly.