{"id":7897,"date":"2026-06-18T08:13:38","date_gmt":"2026-06-18T08:13:38","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=7897"},"modified":"2026-06-18T08:13:38","modified_gmt":"2026-06-18T08:13:38","slug":"mortgage-rate-outlook-shifts-after-fed-decision","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=7897","title":{"rendered":"Mortgage rate outlook shifts after Fed decision"},"content":{"rendered":"

<\/p>\n

The Federal Reserve has officially concluded its fourth meeting of the year \u2014 and its first with Chairman Kevin Warsh at the helm.<\/p>\n

Despite the leadership change, though \u2014 and Warsh\u2019s notably more dovish economic stance than his predecessor Jerome Powell \u2014 it seems the Fed is staying the course.\u00a0<\/p>\n

At least for now.<\/p>\n

What the Fed\u2019s rate decision and where it\u2019s going next<\/h2>\n

The Fed voted to keep its federal funds rate steady, Warsh announced in a post-meeting press conference on June 17.\u00a0<\/p>\n

The move was largely expected by markets. In fact, the CME Group\u2019s FedWatch tool put the odds of a rate cut at less than 1% going into the meeting.<\/p>\n

With inflation jumping to 4.2% last month \u2014 its highest level in over three years, holding rates steady isn\u2019t too surprising. After all, higher interest rates quell borrowing, which quells spending and keeps inflation in check.\u00a0<\/p>\n

In the press conference, one attending reporter even asked why a rate hike wasn\u2019t on the table, given recent inflation data.<\/p>\n

\u201cYou\u2019ve said repeatedly that credibility requires delivering,\u201d said Nick Timiraos, chief economics correspondent for The Wall Street Journal. \u201cIf credibility requires delivering, the move would be to tighten \u2014 or at least to threaten to. You didn\u2019t do that today. Why not?”<\/p>\n

To which Warsh responded, \u201cThat judgment you expressed was not expressed by any of the 19 people around the table. We\u2019ll be meeting in six weeks and we\u2019ll take up the issue again.\u201d<\/p>\n

Related: Fannie Mae predicts mortgage rate change<\/strong><\/p>\n

In short, a rate hike is still possible down the line. In the Fed\u2019s Summary of Economic Projections \u2014 which Warsh questioned the validity of in his press conference \u2014 nine members of the Federal Open Market Committee indicated they expect a rate hike will be necessary by the end of the year. Some had multiple hikes penciled in.<\/p>\n

But that could be the last indication we get out of the Fed for a while, which is officially ending all \u201cforward guidance\u201d from here on out, according to Warsh.\u00a0The new Fed chair also said he’s forming five task forces, which will “propose some well-considered changes, including to the SEP.”<\/p>\n

\u201cNew Fed Chair Warsh said the Fed is eliminating forward guidance on rate policy, because markets should trade on the employment and inflation data they receive, not on how the Fed interprets that data,\u201d says Jeff Taylor, managing director of mortgage platform Mphasis Digital Risk and a board member of the Mortgage Bankers Association.<\/p>\n

\n

Kevin Warsh just held his first press conference. <\/p>\n

Chip Somodevilla &sol; Getty Images<\/p>\n<\/figcaption><\/figure>\n

Where mortgage rates are headed next\u00a0<\/h2>\n

It\u2019s important to remember that the Fed\u2019s rate isn\u2019t a rate consumers will actually see. While it is the basis for many interest rates, especially those on credit cards and variable-rate loans, it has less of an impact on longer-term, fixed-rate products, like mortgages.\u00a0<\/p>\n

Those are more influenced by inflation data, bond markets, and investment activity. They tend to closely follow the 10-year Treasury yield instead.<\/p>\n

That\u2019s not to say the Fed\u2019s move will have no impact on mortgage rates. But it\u2019s not as simple as, \u201cthe Fed held rates steady, so mortgage rates will hold steady, too.\u201d\u00a0<\/p>\n

In my 10-plus years of covering mortgages, I\u2019ve often noticed that it\u2019s the commentary that comes out of the Fed meetings that has the most impact, since it influences investment activity and what markets anticipate is coming down the pike. If investors expect inflation will drop and the Fed might lower its rate, then mortgage rates could fall. If they expect the opposite, it could mean higher mortgage rates instead.<\/p>\n

Take the FedWatch Tool, for example, which showed a notable bump in the chances of a July rate cut in the hours following Warsh\u2019s statements. The day before, there was just an 8.5% probability of a rate hike. By 4 p.m. on June 17, though \u2014 just hours after Warsh\u2019s press conference, the chance had jumped to 32%.\u00a0<\/p>\n

\u201cMortgage rates may rise slightly from 6.625% to 6.75% as Warsh takes over,\u201d Taylor says. \u201cIf 3.3% Core PCE inflation goes higher this year, rates could rise more.\u201d<\/p>\n

More Fed:<\/strong><\/p>\n

    \n
  • Warsh’s first Fed meeting resets interest rate-cut bets<\/strong><\/li>\n
  • Hot May CPI sticks a pin in Fed rate-cut bets<\/strong><\/li>\n
  • Goldman Sachs sends strong message on next Fed rate cut<\/strong><\/li>\n<\/ul>\n

    For now, we have some guidance as to where rates could head thanks to the Fed\u2019s SEP. But things get murky the further you get out, particularly with Warsh eliminating all forward-thinking guidance and calling the SEP’s future into question.\u00a0<\/p>\n

    As of now, though, any notable drops in mortgage rates aren\u2019t looking likely. And until data indicates otherwise, borrowers can expect rates to stay in the mid-6% range or higher.\u00a0<\/p>\n

    \u201cRegardless of Fed action, mortgage rates are unlikely to fall meaningfully until inflation cools and long-term yields move decisively lower,\u201d says Selma Hepp, chief economist at real estate data platform Cotality.<\/p>\n

    Related: Mortgage rate bets shift after surprising jobs report<\/strong><\/p>\n

    #Mortgage #rate #outlook #shifts #Fed #decision<\/p>\n","protected":false},"excerpt":{"rendered":"

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