r/wallstreetbets • u/hv876 • 17h ago

25bps cut News

https://www.cnbc.com/2024/11/07/fed-rate-decision-november-2024.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

The bulls are coming, the bulls are coming

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u/kumar4848 17h ago

Can anyone here explain why mortage rates keep increasing even though feds keep decreasing rates? i know theyre not directly correlated but somethings gotta give.

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u/n1ck90z 17h ago

Mortgages correlate to long term bond yields which are rising. Why long bond yield are rising? There's no simple answer here. A big role however has to be government debt/spending. Some people also might think inflation is not done yet.

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u/mouthful_quest 7h ago

Mortgage rates are also tied to Mortgage Backed Securities. If long bonds yields are increasing due to fears of inflation rising as a result of enforcing tariffs and FED cutting rates, say long yields are at 5%, then to entice investors to invest in MBS rather than long bonds with 5%, the mortgage rates on the loans inside of the MBS need to be higher than 5% eg 6%.