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Money and the economyLesson 3 of 8

Part 1 of 3, 0 done

14 min

Interest rates and the Fed

A committee in Washington votes on one interest rate. A few weeks later a bike shop's credit line costs more, or less. Here's the path in between, and why some rates don't follow it.

Ticket 01 · The guess

Same Fed rate, a year apart

In late October 2025 and again in late October 2026, the Federal Reserve's target range was the same: 3.75–4.00%federalreserve.gov ·2026. In the last week of October 2025, the average thirty-year fixed mortgage rate was 6.17%freddiemac.com ·2026. Guess it in the last week of October 2026.

6.2%
3%10%
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Sources and every number (3)

Sources

  • Open Market Operations: changes in the target range for the federal funds rate · Board of Governors of the Federal Reserve System, 2026
  • Primary Mortgage Market Survey: average 30-year fixed rate, week of October 29, 2026 (conventional, conforming home purchase loans for borrowers with 20 percent down and excellent credit) · Freddie Mac, 2026
  • Consumer Price Index, September 2026 (news release of October 14, 2026): twelve-month changes by item, not seasonally adjusted · U.S. Bureau of Labor Statistics, 2026

Every number

  • 3.75–4.00%federalreserve.gov ·2026 · The Federal Reserve's target range for the federal funds rate: set in late October 2025, cut in December 2025, and set again after a rise in September 2026 (Open Market Operations).
  • 7.24%freddiemac.com ·2026 · Freddie Mac's average thirty-year fixed mortgage rate, the last week of October 2026 (buyers with a fifth down and good or excellent credit).
  • 6.17%freddiemac.com ·2026 · Freddie Mac's average thirty-year fixed mortgage rate a year earlier, the last week of October 2025.
  • 3.7%bls.gov ·2026 · All items, twelve months to September 2026, not seasonally adjusted (Consumer Price Index).
  1. Lessons›
  2. Money and the economy
  • ·Before this: Inflation: why a dollar buys less
  • ·Next: Recessions: when the economy shrinks
Skip to the lesson

Money and the economyLesson 3 of 8

Part 1 of 3, 0 done

14 min

Interest rates and the Fed

A committee in Washington votes on one interest rate. A few weeks later a bike shop's credit line costs more, or less. Here's the path in between, and why some rates don't follow it.

Ticket 01 · The guess

Same Fed rate, a year apart

In late October 2025 and again in late October 2026, the Federal Reserve's target range was the same: 3.75–4.00%federalreserve.gov ·2026. In the last week of October 2025, the average thirty-year fixed mortgage rate was 6.17%freddiemac.com ·2026. Guess it in the last week of October 2026.

6.2%
3%10%
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

We'll also send this page, the lesson, ticket 1, so we can find it. Nothing else. Privacy

·
Sources and every number (3)

Sources

  • Open Market Operations: changes in the target range for the federal funds rate · Board of Governors of the Federal Reserve System, 2026
  • Primary Mortgage Market Survey: average 30-year fixed rate, week of October 29, 2026 (conventional, conforming home purchase loans for borrowers with 20 percent down and excellent credit) · Freddie Mac, 2026
  • Consumer Price Index, September 2026 (news release of October 14, 2026): twelve-month changes by item, not seasonally adjusted · U.S. Bureau of Labor Statistics, 2026

Every number

  • 3.75–4.00%federalreserve.gov ·2026 · The Federal Reserve's target range for the federal funds rate: set in late October 2025, cut in December 2025, and set again after a rise in September 2026 (Open Market Operations).
  • 7.24%freddiemac.com ·2026 · Freddie Mac's average thirty-year fixed mortgage rate, the last week of October 2026 (buyers with a fifth down and good or excellent credit).
  • 6.17%freddiemac.com ·2026 · Freddie Mac's average thirty-year fixed mortgage rate a year earlier, the last week of October 2025.
  • 3.7%bls.gov ·2026 · All items, twelve months to September 2026, not seasonally adjusted (Consumer Price Index).
  1. Lessons›
  2. Money and the economy
  • ·Before this: Inflation: why a dollar buys less
  • ·Next: Recessions: when the economy shrinks