07/02/2026
Are Fed rate hikes coming?
As expected, the Federal Reserve Board held policy rates steady for its fourth consecutive meeting in June. It was the first meeting under the leadership of new Chair Kevin Warsh.
What exactly did the Fed say?
The Fed’s statement described a solid pace of economic growth despite "elevated" uncertainty due in part to the Middle East conflict. The statement described appropriate job gains, no change in unemployment, and strong growth in productivity and capital investment. Inflation remains higher than the 2% goal.
The Board released its quarterly “dot plot,” which aggregates members' forecasts for future interest rate movement. Half foresee a policy rate increase this year, while most of the remaining members expect no change in 2026.
How does this affect mortgage rates?
The Fed does not directly control mortgage rates. Investors had already priced in the Fed's decision, so geopolitical and economic events are more likely to have an impact at this time.
If you've been waiting for more cuts, is it time to make your move? Here are some considerations:
· Going into the June meeting, investors did not expect additional Fed cuts, with many expecting a rate increase in 2026.
· Rates are unpredictable, influenced by global events and economic data. Making a move now can help you lock in today's advantages.
· If rates rise, affordability will be negatively impacted, especially if home prices continue to rise, too.
· If currently renting, buying what you can afford now has long been a way to build equity you may be able to use later toward the home you really want.
Smart options to consider now:
· Hybrid ARMs: Provide lower initial rates before adjusting later
· Fixed rate buydowns: Can lock in a permanently lower rate
· HELOCs: Tap equity without touching your current rate
We can help you compare current vs. potential future costs, walk you through qualifications, or start a pre-approval to put you ahead of the competition when you're ready to make a move.
Quick Fed refresher:
· The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
· This rate was lowered to near zero in March 2020. The Fed began a cycle of increases in 2022 to bring down inflation.
· The Fed moved policy rates back toward neutral with five cuts beginning in September 2024 but has paused the reductions in 2026.
Thinking about buying, refinancing, or accessing equity? Don’t let uncertainty hold you back.
We're here to help, and we're closing loans every day!
