The Federal Open Market Committee (FOMC) is meeting once again this week to assess the health of the economy and potentially adjust the federal funds rate. Read on to learn more about the timeline for this meeting, what it involves, and expected outcomes.

The next FOMC meeting is set to take place on September 16-17, 2025. This will be its sixth scheduled meeting this year; the Fed has two more meetings on the schedule for the remainder of 2025.

Once the meeting concludes, the FOMC will release its policy decisions at 2 p.m. Eastern time. Then the Fed chairman will hold a news conference at 2:30 p.m.

The live news conferences held by Federal Reserve Chairman Jerome Powell are livestreamed and recorded. Additionally, the minutes of regularly scheduled meetings are released three weeks after the date of the policy decision.

Knowing when the Fed meets to discuss monetary policy and tuning into those meetings can help you gain a better understanding of how the economy is doing and help you make more informed decisions about your personal finances.

The Fed is expected to cut the federal funds rate for the first time this year. Following its last meeting, the Fed stated, “Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”

However, in light of a weak jobs report released earlier this month, many experts believe the Fed will finally cut rates.

That said, it’s impossible to predict with certainty when the Fed will make cuts and by how much. So, it doesn’t hurt to be prepared.

Ahead of future Fed meetings — and possible rate cuts — consider taking the following steps to shore up your finances:

Lock in today’s high rates: Certificates of deposit (CDs) currently offer attractive fixed rates, some as high as 4% or more. Securing a CD now can protect your returns before potential rate cuts diminish your interest-earning power. However, be sure to choose a term that fits your savings timeline. Locking in your money for too long could mean incurring early withdrawal penalties if you need to pull out cash before the CD matures. Plus, if the Fed eventually increases rates, you don’t want to be stuck earning a lower yield.

Consider refinancing soon: If you have a fixed-rate loan — such as a car loan, private student loan, or mortgage — refinancing could help you save money. But you may want to wait for the Fed to cut rates again before applying. In the meantime, work on ensuring you qualify for the best rates and terms available by improving your credit and paying down other debts.

Time large expenses strategically: If you're considering a big-ticket purchase like a home or vehicle, it’s a good idea to keep an eye on interest rate trends. If you plan on securing financing, again, you may want to wait and see if interest rates get cut first. Until you’re ready to make your purchase, consistently set aside savings in a sinking fund so you can put more money down and take out a smaller loan.

Read more: A look at the federal funds rate over the past 50 years: How has it changed?

Want to know where interest rates are headed? During tumultuous economic times, it's normal to search for answers about what's to come for your finances.

While there's no way to predict exactly what will happen, the Federal Reserve has tools that some people look to for insights. Among them is the Fed's dot plot, which shows where the Fed's policymakers see interest rates headed in the next few years.

This chart, which is published quarterly, certainly can't guarantee what's to come. In fact, some say it's not worth paying attention to at all. But others look to the dot plot for insights into what the Fed will do in the short term.

The dot plot is a chart that shows how the Fed's top policymakers — members of the Federal Open Market Committee (FOMC) — think the Fed will change short-term interest rates over the next few years.

There are up to 19 dots on the Fed's dot plot, each one representing the prediction of one anonymous member of the Federal Reserve Board. Those predictions are updated at each FOMC meeting based on a review of what's happening with the economy and the outcomes each member believes are most likely in the future.

The Federal Reserve began publishing the chart in 2012 as part of an effort to increase transparency around its policies. The dot plot can now be found in the Summary of Economic Projections published each March, June, September, and December.

The Fed's dot plot might look like a mess at first glance, but it's easy to read with a little guidance.

The Y axis (vertical) shows the target percent for the federal funds rate. On the X axis (horizontal), you'll see the rate predictions for the end of the current year, along with the end of the two upcoming years, and for the "longer run." The longer-run projections show what each member believes will happen if there are no further shocks to the economy.

The dot plot only tells us what the FOMC members estimate will happen to interest rates in the future. But remember, they are educated guesses and they're not necessarily accurate, since a variety of factors could change the ultimate outcome.

With that in mind, here's how you might benefit from reading the Fed's dot plots:

Identify trends that indicate where interest rates are headed.

Get a sense of whether the Fed's members anticipate rate cuts or increases.

Determine how much agreement there is between committee members over future policies.

See if rates are expected to rise or fall, and prepare to shift your investment strategy as needed.

Before using the Fed's dot plot to help with your financial strategies, it's important to acknowledge its limitations.

Historically, the chart is only minimally accurate at estimating rates with a one-year horizon and not at all accurate at predicting rates two or more years in advance. According to Fed Chair Jerome Powell, "The dots are not a great forecaster of future rate moves," and there is actually "no great forecaster."

Why are tools like the dot plot so inaccurate? Mainly because the Fed only influences the economy, but doesn't control it. The Federal Reserve adjusts interest rates based on economic conditions that are beyond its control and are sometimes completely unpredictable, such as inflation and unemployment.

In other words, any number of unforeseen events or policy changes could change the Fed's short-term monetary policy. For example, tariffs or conflicts abroad could have a swift and significant impact on inflation.

On top of that, the dot plot showcases the disagreements between FOMC members about where the economy is headed and what corrective measures are necessary. And as you look further out on the chart, you'll notice their forecasts differ even more.

So you're interested in getting a sense of what will happen with interest rates, don't put too much stock in the Fed's dot plot, especially when it comes to predictions over a year out. Instead, you could be better off taking multiple data points and reports into consideration, including FOMC Meeting Statement, the yield curve, and the full quarterly Summary of Economic Projections.

Mortgage rates haven't moved higher in eight weeks, and this week they took a dive. The average 30-year fixed rate is down 15 basis points this week, and buyers are noticing. Freddie Mac reports that purchase loan applications are seeing the highest year-over-year growth in more than four years.

This could leave potential home buyers wondering, “Is this a good time to buy a house?”

In this article:

Are mortgage rates dropping?

So, will mortgage rates go down at all this year?

Should you wait to buy until mortgage rates go down?

Strategies for buyers in today’s mortgage market

FAQs

As of Sept. 11, Freddie Mac reported that rates for 30-year fixed-rate mortgages were 6.35%. This time last year, mortgage rates were averaging 6.20%.

In situations like these, it pays to look at the numbers. Here’s the Freddie Mac data on mortgage rates for the past 52 weeks as of Sept. 4, 2025:

30-year fixed-rate mortgage: 6.08% to 7.04%

15-year fixed-rate mortgage: 5.15% to 6.27%

If you just go by the numbers, rates on both 30-year and 15-year fixed-rate mortgages remain below the highs noted above. But, yes, mortgage rates have fallen recently. Will they keep dipping?

Dive deeper: Will mortgage rates go back up to 7%?

If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.

When the Fed — the common nickname for the Federal Open Market Committee (FOMC) — held its July 2025 meeting, it voted to keep the federal funds rate the same for the time being. After cutting its rate three times at the end of 2024, it has yet to slash the rate in 2025.

That federal funds rate tends to directly influence rates on shorter-term lending. While mortgage rates aren’t directly based on the fed funds rate, they typically mirror fed fund rate trends. So, if the fed funds rate goes up, mortgage rates will likely follow. The inverse is also true.

The next Fed meeting is set for September 16 and 17. According to the CME FedWatch tool, there’s almost no chance that the fed funds rate won't be cut at this meeting. However, that doesn’t necessarily mean mortgage rates will follow suit. When people anticipate a fed funds rate cut, mortgage rates usually fall in the weeks leading up to the meeting.

And they have.

Learn more: How the Fed rate decision impacts mortgage rates

While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield. As of Sept. 10, the 10-year Treasury yield sat at 4.03% — up from 3.65% a year prior.

You’re probably wondering why today’s mortgage rates aren’t in the 4% range, right?

To determine current mortgage rates, lenders add a “spread” to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the rate on the 10-year Treasury. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans.

For example, the current average 30-year fixed mortgage rate is 6.35%, and the 10-year Treasury yield is 4.03% — a spread of 2.32%.

Read more: When will mortgage rates finally go back down to 5%?

In short, no. You probably shouldn’t wait to buy a home until mortgage rates drop. Mortgage rates are just one part of the affordability equation. You also have to consider home prices, a factor of housing supply and demand.

The current housing market is in a crunch. To put it simply, buyers outnumber homes for sale, especially homes in price ranges accessible to the first-time home buyer. When supply and demand are out of balance like this, home prices tend to remain high since sellers know they’ll have multiple buyers interested.

According to data from the Federal Reserve Bank of St. Louis, the median sale price of single-family homes has generally trended upward since Q1 of 2009. At that time, the median sale price was $208,400. The median price had risen to $410,800 by Q2 2025.

While recession speculation has recently increased, prospective buyers likely won’t see much relief in a true recession. If interest rates drop like they tend to do in recessions, that will increase the number of people looking to buy and lock in a lower interest rate. That drives up demand for the already limited supply of homes.

To truly save, buyers need both interest rates and home prices to drop. Mortgage rates are inching down this month, and housing prices are stagnant or even lowering in certain parts of the country. Still, rates are higher than they were this time last year, and prices are still increasing in many cities. Situations may be improving for buyers, but there’s a lot of work to be done.

Keep reading: Do mortgage rates go down in a recession?

If you crave the comforts of homeownership, the best strategy in today’s market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity.

Yes, shopping for the best mortgage lenders with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools.

There’s no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought.

You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you’ll find that could expand your idea of what “home” looks like — including new developments, school districts, and types of homes.

Learn more: This map shows average mortgage rates by state

If you’re looking to spend less on a home in today’s mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home’s purchase price and puts the cost of renovations into an escrow account. As you make repairs, funds get dispersed.

How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering amenities like parks, shopping, and top-notch schools — all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams.

While shared walls, floors, and ceilings might not immediately scream “dream home,” they could help you find an affordable home in a terrific area. Condominiums come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment.

While the monthly payment on a 15-year mortgage will be higher than the typical 30-year, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you’ll also likely score a lower interest rate and save a ton on interest over the life of your loan.

To make today’s mortgage rates more palatable, look into rate buydown options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary (for your loan's first one to three years, for example). Even a few years of lower rate relief can make today’s home prices more affordable.

Learn more: What will mortgage rates do over the next five years?

Mortgage rates probably will not drop significantly through 2026. The August Fannie Mae Housing Forecast predicts that rates will continue to decrease gradually but will stay just above 6% throughout 2025 and 2026.

Compared to historical mortgage rates, 7% isn’t considered a high rate. While it might be high compared to pandemic-era rates that were sub-3%, it’s on par with mortgage rates in the 1990s, and considerably lower than the double-digit rates seen in the late 1970s and early 1980s.

It’s not impossible to get a 3% interest rate, but doing so requires the perfect set of circumstances. You’d need to find a homeowner with an assumable mortgage — one that can be passed to a new owner at the same interest rate as the original loan. Assumable mortgages are generally government-backed loans from agencies like the VA, FHA, or USDA.

Laura Grace Tarpley edited this article.

On December 18, the Federal Open Market Committee (FOMC) lowered its benchmark interest rate by 25 basis points or 0.25%, to a range of 4.25% to 4.50%. The move follows a 50-basis-point reduction in September and a 25-basis-point reduction in October.

The cut was expected by investors based on Fed cues earlier in the year. The committee adjusts interest rates in part to encourage a long-term inflation rate near 2%. After three years of inflation above 3%, the rate of price increases fell to 2.4% in September 2024 before rising to 2.7% in November.

The Fed also indicated there would likely be only two rate reductions next year rather than four as previously predicted. The more conservative approach is prompted by the recent uptick in inflation and uncertainty over the outcomes of President-elect Trump’s policies.

The big question investors are asking is how these lower rates could affect their portfolios and investment strategies. Let's provide answers with a closer look at how the stock market typically responds to falling interest rates.

Latest news: Cautious Fed holds rates steady with Trump unknowns looming over outlook

When the Fed cuts interest rates, banks lower the rates they charge on loans made to their customers. On existing variable-rate debt, the reductions are immediate. In this case, business and consumer borrowers quickly benefit from lower ongoing interest expenses. New fixed-rate loans also get cheaper, but existing fixed-rate borrowings are not affected. Fed rate cuts can, however, create opportunities to refinance fixed-rate loans at lower interest rates.

In short, rate cuts lower the cost of borrowing. Cheaper debt is usually good for business, but the reason for the rate reduction influences how corporate leaders and investors respond.

If the Fed lowers rates because inflation is slowing, the response should be positive. Businesses are likely to pursue growth more aggressively. Investors, expecting higher earnings ahead, may funnel more capital into the stock market. This can push stock prices higher.

Lower rates can negatively affect the stock market when they are prompted by an economic slowdown. When the economic outlook is uncertain, corporate leaders and investors can be more cautious about investing in growth.

According to Robert R. Johnson, CEO and chair of active index strategy developer Economic Index Associates, "historically speaking, equities perform substantially better when the Fed is lowering rates rather than when the Fed is raising rates."

Learn more: What is the Federal Reserve?

Investor expectations heavily influence stock prices. For this reason, the effects of a rate change usually begin well before the Fed acts.

When investors expect a rate reduction and the economic outlook is good, stock prices rise. Once the Fed implements the cut, the after-effects can be minimal. The exception is if the rate reduction is more or less aggressive than investors had expected. In that case, the market may shift again as investors adjust to new circumstances.

Learn more: Your step-by-step guide to investing

Johnson, who has extensively studied how the Fed's policies affect stock market returns, identifies the best-performing sectors when interest rates are falling as autos, apparel, and retail.

Johnson also sees opportunity in real estate investment trusts or REITs, particularly mortgage REITs. "With rates expected to continue to fall in 2024 and beyond, both equity REITs and mortgage REITs could be attractive investments," Johnson said.

Learn more: How to invest in real estate: 7 ways to get started

David Russell, global head of market strategy at trading platform Tradestation, expects lower rates to benefit cruise ship operators and airlines. "They're economically sensitive and have significant debt loads," Russell said. "Lower inflation will help their profitability, while lower rates could reduce their borrowing costs."

To summarize, lower interest rates are particularly good for real estate values and companies that rely heavily on debt or discretionary consumer spending.

Investors routinely adjust their holdings and trading behaviors according to their economic outlook. This is evident in the market movements that follow reports on inflation, jobs, and gross domestic product.

Learn more: Jobs, inflation, and the Fed: How they're all related

As an example, the S&P 500 experienced a single-day decline of 3% in early August 2024 after a disappointing July jobs report sparked recession worries.

Market shifts prompted by investor-sentiment trends can encourage many to wonder what moves they should be making ahead of Fed-rate actions. The right answer depends on the investor's timeline and strategy.

Learn more: When is the Fed’s next meeting?

Investors who need to maximize income or growth within a relatively short timeline may see the opportunity to adjust holdings according to the interest rate climate.

Commonly, this involves shifting exposure between stocks and bonds. Bonds are favored when interest rates are rising, while stocks become popular as interest rates fall.

On the other hand, long-term investors with high-quality, diversified portfolios may want to avoid big changes in response to rate adjustments. Overhauling a portfolio based on temporary conditions can easily undermine results over time.

Lane Martinsen, founder and CEO of Martinsen Wealth Management LLC, describes the dangers of making short-term decisions for long-term portfolios.

"Reacting to rate changes can lead to emotional decision-making, which can harm long-term performance," Martinsen said. "Frequent buying and selling to 'time' the market often results in higher costs, taxes, and missed growth opportunities."

Long-term investors might instead rely on changing economic conditions to prompt periodic reviews of their portfolio composition or asset allocation. If the allocation is performing and the risk profile is acceptable, few to no adjustments are needed.

Still, a proven allocation strategy may allow for small changes to improve performance as interest rates evolve. In this scenario, Johnson recommends adjusting sector exposure.

Specifically, when interest rates are expected to drop over time, investors could reduce financial and utilities holdings while increasing exposure to autos, apparel, and retail — sectors that have historically shown strength in falling rate environments.

Investors can implement sector-based adjustments without changing their relative exposures to broader asset classes, such as stocks, bonds, and alternative assets. Doing so should keep the portfolio's risk and appreciation potential fairly stable, which is critical for long-term growth.

With fewer rate reductions now expected in 2025, any boost to earnings or bond prices next year will be more muted. There are also other, potentially offsetting, factors in play. Two to note are high valuations in the S&P 500 and unknown outcomes from any policy changes made by the new president. Major portfolio or strategy changes at this point could be premature. This may be the time for investors to focus on the long-term rather than chase uncertain gains.