The Fed cut rates by 1% in 2024, bringing the Fed Funds Rate down to 4 1/2%. The Fed is also forecasting another 1/2% cut by the end of 2025. It should be noted that these forecasts may change, in either direction, as economic data presents itself. The Fed is trying to ease interest rates to keep the economy from entering a recession. Let’s remember that mortgage rates may not directly follow the Fed Funds Rate or move in similar increments. But if the overall interest rate environment is moving lower, that’s typically a good sign for mortgage rates.