Wendy Edelberg

I'm Justin Ho for Marketplace.

If you listen to this show regularly, you know that when the Fed cuts interest rates, it doesn't necessarily mean that mortgage rates come down.

That's because the interest rate the Fed sets is for short-term debt, and mortgages are long-term, usually 15- or 30-year loans.

Daryl Fairweather at Redfin says most people who get a 30-year mortgage tend to either pay it off, refinance, or move within 10 years.

So they tend to track really closely together.

And one of the key factors that drives the yield on 10-year Treasury bonds is expectations about where inflation might be headed over the long term.

Just because the president wants lower interest rates doesn't mean that lower interest rates would be good for the economy.

George Barrow at Texas A&M University says if investors do start to question the Fed's independence and credibility and get nervous that inflation is going to rise over the long term.

especially on bonds and longer-term loans.

And mortgages, as inflation expectations get built in to interest rates.

I'm Samantha Fields for Marketplace.

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