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How, with the Fed rates so low, is there no trickle down effect to mortgage rates? It seems to me with the current housing crisis there should be some mandate to bring the mortgage rates down so people can refinance into fixed rate loans. I understand that mortgage rates used to be tied to the 10 year T-note and the Fed rate, but this doesn’t appear to be true any longer ” Whats going on? The Fed lowers short term interest rates and not 1st mortgage rates. It is how the bond and stock market react to these changes as well as the overall economy. Mandating lower mortgage rates would wreak havoc on our economy. The market has to have some level of self-governing or there would be no one in it. Recently, the 30-yr. mortgage backed securities have had a much greater influence over rates then the 10-yr. T-Bill.