The Fed may cut interest rates next week. Here's what happened to mortgage rates the last two times it did that.

Fed rate cuts and mortgage interest rate responses don't always line up neatly. Wipada Wipawin/Getty Images

Anticipation over a Federal Reserve interest rate cut, which was barely registering a few weeks ago, is now growing to a fever pitch. Following an unemployment report that showed the rate increasing to its highest level since October 2021 and new data this week that show 32,000 private-sector jobs lost in November, not to mention concerns over widespread layoffs , the chances of a Fed rate cut to stimulate the economy are rising. As of December 4, 2025, the CME Group's FedWatch tool has a cut for the December 10 Fed meeting listed at just under 90%.

And while the unemployment concerns are significant, any new rate cut will be welcome for borrowers, especially homebu