Does the Federal Funds Rate Affect Mortgage Rates?
The short answer: No.
This graph contrasts the movements of the weekly average Federal Funds rate against the movements of the weekly 10-year Treasury Constant Maturity and those of the average 30-year fixed rate mortgage and 5/1 Hybrid ARM. It covers the period from January 2005 through January 2008.
Sources: Federal Reserve, HSH Associates.
