Why mortgage rates may fall before the September Fed rate cut is issued

Mortgage interest rates are well-positioned to decline this September, perhaps before a rate cut is even formalized. Getty Images/iStockphoto

September 17. That's when the next Federal Reserve meeting will conclude, and with it, many experts now predict that the first interest rate reduction of 2025 will be issued.

While multiple rate reductions were issued in the final months of 2024, the federal funds rate remained frozen throughout 2025, stuck at a range between 4.25% to 4.50%. But that's expected to change this month, with the chances of a rate reduction currently listed at more than 95%, according to the CME Group's FedWatch tool.

This will result in lower interest rates on savings vehicles, such as certificates of deposit (CDs) and high-yield savings accounts . But