“I keep telling people the Fed cutting rates doesn’t mean that mortgage rates will go down,” Cohn said. “Mortgage rates move on economic data, and the bond market is now saying, ‘Ho hum, basically.’ I think they really didn’t like his ‘risk management’ comment. That showed a more cautious approach, and that the door is not wide open for many more cuts. Certainly not a bigger cut than a quarter-point cut.”
After months of holding steady even in the face of intense political pressure from the Trump administration, a weakening jobs market was finally the fuel needed to drive the Federal Reserve to cut.https://t.co/ugx4JBsPYB
— Mortgage Professional America Magazine (@MPAMagazineUS) September 17, 2025
As Powell indicated in his press conference after the rate decision, the central bank finds itself in a challenging spot with its two primary mandates moving in opposite directions. For most of the year, the central bank leaned more heavily on keeping inflation in check, so it held rates steady. Now, Powell indicated that the balance has swung back toward the job market, which led to a move that Cohn agreed with.
“The Fed has always been very conservative,” Cohn said. “Their job is to do what’s best for the American people, and not what one person, perhaps the president, may say. Everyone wants lower rates. Everyone wants more affordability. No one can afford for the rate of inflation to skyrocket. No one can really afford for us to go into a period of stagflation, so I think the Fed was prudent in what they did today and what they’ve said.”
What to expect from the Fed
Cohn thinks, barring something unforeseen, that we will see additional cuts from the Federal Reserve. However, there might not be as many cuts as some people may be forecasting.
“I think that we’re not done with cuts, but I think that the expectation that there will be multiple cuts this year and multiple cuts next year is off the table,” Cohn said. “I think that they’re still very much concerned about the inflationary impact of these tariffs, and that we really have not yet begun to see the real impact, as many companies have been absorbing the cost of the tariffs.
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