can someone please explain how fed rate cuts effect mortgage rates?

Maybe this is a really stupid question.

I hear about the fed cutting rates by (aprox) 2.25% over the past few months. I want to refinance from a 5yr interest only ARM (100% financing / 6.5% rate / as of 09/06) to a 30-yr fixed rate loan. I keep hearing that the recent fed rate cuts don’t effect fixed-rate mortgages much. Is that true? Can someone please explain how and why this is?

Also what’s the difference between APR and Rate? (like on the Bankrate.com site)

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