Why mortgage rates are actually going up after the Fed cut interest rates

Core Viewpoint - The increase in 30-year mortgage rates following the Federal Reserve's interest rate cut is attributed to market expectations regarding future policy moves, despite the initial counterintuitive nature of this trend [1][7]. Group 1: Federal Reserve Actions - The Federal Reserve cut its benchmark interest rate by 25 basis points, bringing it to a range of 4% to 4.25% [4]. - This rate cut was anticipated by the market, which has historically seen mortgage rates react differently than expected [7]. Group 2: Mortgage Rate Movements - Following the Fed's announcement, the 30-year mortgage rate increased by 9 basis points to 6.22% on the same day, and then rose an additional 15 basis points to 6.37% the next day [5]. - In contrast, Freddie Mac's report indicated that mortgage rates fell to the lowest level in 12 months, as it collected data before and after the Fed's decision [6]. Group 3: Market Reactions - The spike in mortgage rates was relatively small and reflects how financial markets are interpreting the Fed's future policy direction [1]. - The crash of Mortgage News Daily's website during the announcement indicates a significant public interest in mortgage rate changes [4].