If you’re watching the Federal Reserve this week and waiting for a crystal-clear signal on your mortgage rate, I get it. The headlines are loud. The prediction markets have been leaning toward a hike. And for a lot of Phoenix and Maricopa County buyers, it feels like every Wednesday press conference is going to decide whether you can buy.
Here’s the part that doesn’t fit in a two-line alert: when the Fed raises its short-term policy rate, mortgage rates do not automatically move the same way. Sometimes they improve. Sometimes they don’t. The bond market is the referee, not the press release.
I’m Michael McDermott, a mortgage lender with NEXA Lending (NMLS 184065). I don’t sell homes. I’m not a realtor. I take one application and one credit report, shop roughly 300 lenders, and we pick from real options — not whatever one shop happens to have on the board that morning.
What the Fed actually controls
The Fed sets the federal funds target — overnight bank-to-bank money. That’s not your 30-year fixed mortgage.
Mortgage rates track longer-term bond yields and mortgage-backed securities. Investors are constantly asking whether inflation is cooling, whether oil is spiking, whether the Fed looks serious, and whether treasuries look attractive enough to buy. Your rate is a long-bond story with a housing wrapper.
So when someone says “the Fed hiked, rates are going up,” they’re mixing two different dials. Related? Yes. Locked together? No.
Why a hike can help mortgage rates (the irony)
In last week’s market tape, patience in the bond market was running thin. Core inflation’s year-over-year print looked better, but the monthly bump still pushed hike odds way up. Oil news added more heat. Existing home sales slipped again while inventory built. Conventional and jumbo quotes for well-qualified buyers were already above 7% as of that Monday snapshot, with FHA and VA still roughly a half-point better in the mid-upper 6%s — all of that as a moment-in-time picture, not a promise for your situation.
Here’s the counterintuitive part I keep walking buyers and realtors through: if the Fed takes decisive action and the bond market believes inflation risk is being handled, mortgage rates can improve even after a hike. Markets sometimes sell bonds and push yields higher when they think the Fed is soft. Aggressive, credible action can do the opposite.
There’s an old bond-market line that fits: the cure for higher rates is higher rates. When yields get high enough, buyers come back into treasuries and MBS, and that demand can push mortgage rates down. We’re not declaring that we’ve hit that magic number. We’re just naming the mechanism so the Fed week doesn’t feel like a coin flip for your payment.
What this week means for a Phoenix buyer
If you’re shopping in Phoenix, Mesa, Scottsdale, Chandler, Gilbert, Peoria, or elsewhere in Maricopa County, treat the Fed decision as context, not a pause button.
- Don’t freeze a purchase conversation solely because Wednesday’s announcement is on the calendar.
- Do lock when your contract timeline and your rate comfort line up — not because a headline told you to wait for perfection.
- Remember advertised “rates” from hundreds of companies usually assume points and a clean credit and loan profile. Your price is your credit, your down payment, your property type, and which lenders will actually take the loan.
Program mix still matters in this tape. FHA and VA can look different from conventional. Jumbo and investment properties price their own lane. That’s why one shop’s quote is a starting point, not the market.
What I won’t claim
I won’t tell you rates are about to crash. I won’t promise what Wednesday’s statement will do to Friday’s locks. I won’t say every buyer should wait, or that every buyer should rush.
What I will do is put your situation next to today’s options — purchase, refinance, or wait — and shop your options across the broker channel so you’re not stuck with one lender’s story about “the Fed.”
If you want a human look, start at themcdteam.com. Apply if you’re ready for a full application, or Schedule a Call if you’d rather talk first. Happy to help either way.
FAQ
If the Fed hikes 0.25%, does my mortgage rate jump 0.25% the same day?
Not automatically. Mortgage rates respond to bond-market confidence about inflation and policy, not a one-for-one match to the Fed funds target.
Should I wait until after the Fed meeting to get pre-approved?
Usually no. Pre-approval is about knowing what you qualify for and how strong your offer can be. Timing a lock is a separate conversation once you have a contract and a clear rate comfort zone.
Why are FHA and VA often lower than conventional right now?
They’re different programs with different investor pricing. As of the Sep 14 snapshot in my Monday note, FHA and VA were still roughly in the mid-upper 6%s while conventional and jumbo for well-qualified buyers sat above 7%. That’s a snapshot, not a guarantee for your credit or property.
Does oil news really affect my mortgage rate?
It can. Higher oil can feed inflation expectations, and inflation expectations move longer yields. It’s one input among several — jobs, CPI, Fed credibility, and overseas risk all sit in the same stew.
Where do I start?
themcdteam.com — Apply or Schedule a Call. I’m Michael McDermott, NMLS 184065, NEXA Lending, serving Arizona and my other licensed states.