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The Federal Reserve recently cut its benchmark interest rate for the first time since the onset of the COVID-19 pandemic, and not only that, but the rate cut was significantly more aggressive than many experts had predicted.

However, this is widely expected to be just the first in a series of rate cuts that will last into 2026 at a minimum. Mortgage rates certainly fell quite a bit in anticipation of the September rate cut, but what happens if the Fed cuts rates again at its next meeting in November? Unfortunately, there isn’t an easy answer, but here’s what you should keep in mind.

The Fed is expected to keep cutting rates at its next meeting

Along with its September rate cut, the Federal Reserve released the economic projections of the policy-making members. This included, among other things, the members’ expectations for future rate cuts.

The median expectation from the Fed members is for an additional 50 basis points (half a percentage point) of rate cuts before the end of the year. There are two more scheduled Fed meetings this year, one ending on Nov. 7 and another ending on Dec. 18.

According to the CME Group’s FedWatch tool, which shows what interest rate expectations are priced into financial markets, there’s a 65% chance that we’ll get a 25-basis-point rate cut in November and a 35% chance we’ll see another 50-basis-point cut. But a key takeaway is that it’s a near certainty that we’ll get a rate cut at the conclusion of the next Fed meeting.

Mortgage rates aren’t always reactive to rate cuts

Mortgage rates certainly fell after the Fed announced its 50-basis-point rate cut in September, but it wasn’t necessarily because there was a rate cut. Instead, it is because the rate cut was significantly more aggressive than many had expected. Without getting too deep into the weeds here, there are generally two situations related to Fed rate cuts that can cause mortgage rates to move significantly lower.

Future expectations for interest rate cuts increase

For example, when employment and inflation data was released in June and July, it started to become much clearer that the Fed was going to cut rates in September. That’s when we saw mortgage rates make their largest move to the downside.

Actual rate cuts are more aggressive than expected

Heading into September’s Fed meeting, experts were split between expectations of a 25-basis-point cut or a 50-basis-point cut. We ended up getting the larger cut and saw consumer interest rates (like mortgages) move lower after. So, if we get another 50-basis-point rate cut in November, we could see consumer interest rates fall in reaction to it.

To be perfectly clear, other factors influence mortgage rates, in addition to the benchmark interest rates set by the Fed. For example, supply and demand dynamics play a role, as does the current economic climate.

And mortgage rates are also heavily influenced by future interest rate expectations, not just what the Fed has already done (this is why rates have fallen so far already). That’s why average mortgage rates move from day to day, not just eight times a year when the Federal Reserve’s policy makers release their latest interest rate decision.

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Rates are likely to trend lower, but don’t count on an immediate impact

Mortgage rates are likely to move lower over the next year or two if the Fed rate cuts proceed as expected. In fact, Fannie Mae expects average 30-year mortgage rates of 5.7% by the end of 2025, which could certainly make it more affordable to buy or refinance a home.

But as far as the impact of a November rate cut, it depends on the magnitude of the cut, the language the Fed uses in its accompanying statement, comments made by Fed chair Jerome Powell, and other factors.

One thing to keep in mind is that Fannie Mae’s expectation — and those of most other experts I’ve seen — isn’t for a dramatic drop. So, if you’re in the market for a home and can afford the payment at the current rates, it could be a smart time to buy. After all, if Fannie Mae is wrong and rates end up plunging back into the 4% range, you can always refinance.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Matt Frankel has no position in any of the stocks mentioned. The Motley Fool recommends CME Group. The Motley Fool has a disclosure policy.