Powell’s Jackson Hole Remarks Push Mortgage Rates to 2025 Lows

Here’s the takeaway: the market is now pricing in a strong likelihood of a Federal Reserve rate cut in September. But don’t assume this automatically means mortgage rates will slide immediately afterward. History tells a cautionary tale back in late 2024, mortgage rates actually jumped higher shortly after the Fed implemented a September rate cut, even from already-low levels.

Whether September 2025 will follow the same pattern remains to be seen. Economic data released in October and beyond will ultimately determine the trajectory. Last year, mortgage rates had fallen to long-term lows during the summer, fueled by weaker economic readings that increased expectations for a Fed cut. Rates respond far more to these expectations than to the actual Fed meeting itself. By the time the central bank holds its scheduled policy session, the market has often already moved on, reacting to fresh economic signals.

This dynamic is playing out again, as traders now see more than an 80% chance of a September rate cut. That probability jumped noticeably on Friday following Fed Chair Jerome Powell’s speech at the Fed’s annual Jackson Hole Symposium.

Powell’s remarks didn’t contain major surprises. He reiterated the Fed’s ongoing balancing act between fostering a strong labor market and keeping inflation in check. But Friday’s speech highlighted incremental softness in the job market, giving markets reason to believe a near-term rate cut is increasingly plausible.

Earlier in the summer, robust jobs reports allowed the Fed to maintain higher rates while monitoring inflation risks from tariffs. However, the July 30th jobs report, followed by sharply weaker revisions to prior reports, shifted the narrative. Markets have been waiting for the Fed’s confirmation of that labor market softening before adjusting expectations.

Investors and traders had already begun pricing in a September cut following the weaker jobs numbers, but Powell’s remarks provided the confirmation that triggered a stronger market response. These expectations, more than the Fed’s future actions, drive day-to-day movements in mortgage rates.

The result: mortgage rates experienced their largest decline since the August 1st jobs report, narrowly surpassing the lows seen on August 13th to reach the lowest levels of 2025. The last time the average 30-year fixed rate was any lower was October 3rd, 2024. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.