.jpg)
At its December 10 meeting, the Federal Reserve lowered its benchmark interest rate by 0.25%, bringing the Fed Funds Rate target range down to 3.50%–3.75%. This was the third rate cut of the year, following similar moves earlier in September and October.
If you’re buying, refinancing, or simply watching the market in Seattle, Kirkland, or Bellevue, here’s the important part: the Fed Funds Rate doesn’t directly control mortgage rates — but it strongly influences overall borrowing conditions, and it often shapes how lenders price mortgages over time.
The Fed’s decision reflects a balancing act between two competing realities:
Inflation is still above the Fed’s goal of 2%
The job market is showing signs of slowing
When inflation stays elevated, the Fed is typically cautious about cutting rates too quickly. But when employment weakens, the Fed often shifts toward supporting the economy by easing borrowing costs.
That tension is exactly what we’re seeing now — and it’s why the Fed continues to move carefully.
Fed Chair Jerome Powell summed it up by saying there is “no risk-free path” forward. In plain terms: whatever the Fed does next involves trade-offs.
The decision wasn’t unanimous.
Governor Stephen Miran argued for a larger cut of 0.50%
Regional Fed presidents Jeffrey Schmid (Kansas City) and Austan Goolsbee (Chicago) preferred no cut at all
A split vote like that shows policymakers are not fully aligned. Some are focused on inflation risk, while others want to prevent the labor market from weakening further.
For buyers in Seattle, Kirkland, and Bellevue, this matters because it suggests the Fed could move slower in the future — or potentially speed up — depending on how economic data evolves.
Looking ahead, the Fed’s projections suggest the “middle-of-the-road” expectation is at least one additional 0.25% cut in 2026. But that outlook is not locked in, and the Fed itself is divided on what should happen next.
Even at this meeting, 6 out of 19 Fed officials preferred holding rates steady, showing caution among both voting and non-voting members.
Translation: rate cuts may continue, but the timing is far from guaranteed.
One detail most people don’t follow closely — but should — is how the Fed’s voting committee changes year to year.
Here’s how it works:
The 7 Fed Governors (including the Chair) always vote
The New York Fed President always votes
The remaining voting seats rotate annually among regional Fed presidents
That means the Fed can become more “hawkish” (focused on fighting inflation) or more “dovish” (focused on supporting employment and lower rates) depending on who is voting.
The Fed could become more open to rate cuts in 2026 depending on who is voting, and how economic conditions shift.
Some officials who have been more inflation-focused are expected to rotate off the committee. If new voting members are more supportive of easing policy, the Fed may become more willing to cut rates again — especially if the job market continues weakening.
This doesn’t guarantee lower mortgage rates, but it can shape the overall environment for borrowing.
Here’s the practical takeaway for local borrowers:
✅ The Fed cutting rates can eventually reduce borrowing costs
✅ Mortgage rates don’t automatically drop the same day the Fed cuts
✅ Rate movement depends heavily on inflation, jobs data, and bond markets
✅ If the economy slows and inflation continues easing, mortgage rates could trend lower over time
For buyers in Seattle, where affordability is a major hurdle, even modest rate improvements can add real purchasing power.
For Kirkland buyers, where demand remains strong and inventory can be limited, having a strategy for rate locks and approvals matters more than timing the perfect week.
And for Bellevue, where higher loan amounts and jumbo financing are common, even small rate changes can have a major effect on monthly payments — making it smart to explore options early.
The Fed’s December rate cut supports a gradual shift toward easier borrowing conditions, but mortgage rates are still influenced by inflation, employment data, and global bond markets.
If you’re shopping for a home or considering refinancing in Seattle, Kirkland, or Bellevue, the best move right now is to stay prepared — because the market can change quickly, and buyers who are ready tend to win.
At Home Right Lending, we’re a mortgage brokerage (not a lender), which means we work with multiple lenders to find the best fit for your loan goals — whether you’re buying your first home, refinancing, or dealing with a more complex financial picture.
Want to know what today’s rate shift could mean for you?
Give us a call — we’ll break it down in plain English and help you make the right move.