Fed Holds Interest Rates Amid Housing Market Strain, UK Cuts Base Rate

The Federal Reserve has maintained interest rates at 4.25%-4.5%, disappointing U.S. homebuyers hoping for rate cuts that could revive the sluggish housing market and reduce mortgage costs. Experts suggest that while a rate reduction this year is likely, it may come due to weakening economic conditions rather than easing inflation pressures. In contrast, the Bank of England recently cut its base rate from 4.5% to 4.25%, a move seen as too modest by some economists but expected to support a gradual decline in mortgage rates in the UK. The Bank of England’s decision has sparked debate about the extent of future cuts amid ongoing inflation concerns and mixed opinions within its Monetary Policy Committee. U.S. political figures, including President Donald Trump, continue to pressure the Federal Reserve for more aggressive rate cuts to stimulate economic growth. Meanwhile, mortgage experts in the UK view the recent base rate cut as a positive, albeit small, tailwind for homebuyers and those refinancing, signaling cautious optimism for housing market improvements.