Why is the interest rate higher for potential home buyers when the Fed has cut the interest rate ?

(My Original Blog Post: -*http://www.latesttrendsguide.com/?p=2116)

My DH and I have an offer on a short sale home, and we went to the bank today to ask some questions about our potential loan and found out that the interest rate for our 30 year fixed loan has increased to over 7%. Today the Fed cut the interest rate to 1.5%. How do those cuts affect people with great credit who want to buy a home?

By: cambreezie