Fed Rate Cut Spurs Mortgage Rate Dip, Easing Weighs on ARM Trading

Current ARM Mortgage Rates Report for Dec. 17, 2025

As of Dec. 17, 2025, the average 30-year mortgage rate stands at 6.12%, while the 15-year mortgage rate averages 5.50%, according to the latest data. These figures reflect a modest decline from earlier in the week, with refinance rates also trending downward. The rates, while not as favorable as those seen a few years ago, still present meaningful savings opportunities for homeowners, particularly those who bought in a higher-rate environment.

The Federal Reserve's final rate cut of the year was recently finalized, and its impact is already being felt in the mortgage market.

The Fed reduced its benchmark rate by 25 basis points in its December meeting, bringing the target range to 3.50%-3.75%. This action, combined with a broader easing of monetary policy, is expected to influence borrowing costs going forward.

Investors and analysts remain cautiously optimistic about the housing market's potential for stability, especially with rates stabilizing in this range. However, market observers are closely watching for any new economic data that might shift the trajectory of these rates.

ARM Stock and Institutional Investor Activity

Institutional investors continue to show mixed activity in ARM Holdings PLC Sponsored ADR (NASDAQ:ARM). Liontrust Investment Partners LLP reduced its stake by 6.9% in the second quarter, selling 13,273 shares and ending the period with 177,909 shares valued at $28.78 million. This move was offset in part by other investors such as Cim Investment Management Inc., which raised its holdings by 99.6%, acquiring 8,770 additional shares during the quarter. Meanwhile, Marex Group plc added $2.63 million to its ARM position, indicating a broader range of strategic interest in the stock.

Other notable players include Huntington National Bank and FWL Investment Management LLC, both of which acquired new positions in the second quarter, valued at $30,000 and $34,000 respectively. These smaller investments suggest a growing institutional confidence in the company's long-term prospects.

Analyst Outlook and Market Fundamentals

Analysts remain broadly positive about ARM, with an average rating of "Moderate Buy" and an average price target of $179.80. Several major firms have recently raised their price targets, including Loop Capital (up to $180), Wells Fargo (up to $195), and TD Cowen (up to $190). The stock opened at $130.89 on Friday, trading well below its 50-day and 200-day moving averages of $152.35 and $147.47, respectively. ARM's 52-week range is between $80.00 and $183.16, reflecting significant volatility.

Recent earnings results have bolstered analyst optimism. ARM reported $0.39 earnings per share for the quarter, surpassing estimates of $0.33. Revenue came in at $1.14 billion, a 34.5% increase year-over-year, driven by strong demand for its IP and AI-related technologies. The company also issued Q3 2026 guidance of $0.370–$0.450 EPS, further reinforcing its growth trajectory.

Broader Economic and Monetary Policy Context

The Federal Reserve's recent decision to cut rates by 25 basis points was accompanied by a broader policy easing. In addition to the rate cut, the Fed announced a program to purchase $40 billion per month in Treasury bills to address liquidity concerns in the money markets. This move, termed Reserve Management Purchases (RMPs), is intended to inject liquidity and prevent a repeat of the 2019 liquidity crunch. While the Fed has described RMPs as temporary, analysts argue that the scale of these purchases-projected to total $240–$480 billion annually-has meaningful inflationary implications.

The U.S. Treasury's heavy issuance of T-bills to fund government operations has also played a role in the tightening of money markets. The Fed's RMPs are effectively providing 44% of the Treasury's funding needs for the next quarter. This dynamic highlights the interconnectedness of fiscal and monetary policy, with the Fed stepping in to ensure market stability amid heightened fiscal demand.

What This Means for Investors

For investors considering ARM or other technology stocks, the current environment presents both opportunities and risks. The company's strong revenue growth and analyst optimism point to a compelling long-term investment case, especially given the structural tailwinds from AI and semiconductor demand. However, the stock's high valuation-reflected in a P/E ratio of 167.81-means it remains susceptible to broader market corrections.

In the broader market, the Fed's easing of monetary policy could spur increased risk-taking and asset allocation toward equities. That said, investors must also remain mindful of inflationary pressures and potential shifts in fiscal policy. The interplay between the Fed's RMPs, Treasury borrowing needs, and global economic trends will be key to watch in the coming months.