How does the Federal Reserve's interest rate policy affect mortgage rates? Well, interestingly enough, the Federal Reserve actually doesn't have a lot of impact over mortgage rates. In fact, if you want to identify what rate makes the most difference to a 30-year mortgage, you have to look at the ten-year Treasury bond. That Bonds interest rate has the most influence over where 30-year mortgage rates go. And over the last handful of months, even since the beginning of the year, we've seen the ten-year interest rate increase quite substantially. And alongside that, we've seen mortgage rates peak above 7% as recently as a few weeks ago. So when we're looking for where we think interest rates are going to go for mortgages, we don't need to focus too much on the Federal Reserve. We need to focus on what's going on with that ten-year Treasury.

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