From a Fitch ratings director to a 44-year broker veteran, the reaction to October’s rate hold points in one direction
Analysts from Fitch Ratings, Bankrate, and William Raveis Mortgage have delivered a consistent verdict on the Federal Reserve’s October 2026 rate hold: the pause resolves little.
Across the board, the message for mortgage professionals is that December remains the meeting to watch — and that mortgage rates will continue to be shaped by forces well beyond the Fed’s benchmark.
The Federal Reserve held its benchmark rate unchanged at its October meeting, one month after September’s first hike in three years, leaving mortgage professionals with few answers heading into year-end.
The Bureau of Labor Statistics reported September’s Consumer Price Index at 3.7% annually, nearly double the Fed’s 2% target. Payrolls added just 29,000 jobs last month, pushing the unemployment rate to 4.2%.
Mortgage rates currently sit at approximately 7.33%, down from above 7.6% in recent weeks.
Brokers reading mixed signals
Melissa Cohn, Regional Vice President of William Raveis Mortgage in New York and a 44-year industry veteran, said the outcome was widely anticipated but offered little reassurance.
“As expected, the Fed left the Fed Funds rate unchanged at today’s meeting. The Fed is trying to balance stubbornly high inflation with a fragile labor market and stretched consumers. We are also less than a week away from the Midterm elections, and the Fed doesn’t want to appear political.”
On the forward outlook, Cohn pointed to December as the next live flashpoint — one MPA economist said a near-term rate hike was ‘no longer unthinkable’ heading into this week’s decision.
"The bond market expected the Federal Reserve to leave interest rates unchanged at today’s meeting, but anticipates one or two rate increases in the coming months, possibly beginning in December," she added.
"We can hope that the markets remain stable and last week’s rate improvements hold. Where mortgage rates go next will largely depend on oil prices and the war in Iran."
Will the midterms bring lower mortgage rates? Not everyone thinks so. Glen Weinberg of Fairview Commercial Lending believes broader economic pressures could keep rates elevated regardless of the election outcome. https://t.co/d0Vlj3f3Sy
— Mortgage Professional America Magazine (@MPAMagazineUS) October 26, 2026
Mortgage rates track Treasuries, not the Fed
Jeff Ostrowski, Housing Market Analyst at Bankrate, said the hold underscores a dynamic familiar to brokers.
“The Fed doesn’t control mortgage rates, a reality underscored by the central bank’s move in mid-September: The Fed raised its benchmark rate a quarter point, and mortgage rates jumped three-quarters of a point in a month. The lesson? Mortgage rates move with 10-year Treasury yields, not the federal funds rate. And 10-year yields are down to about 5%, compared to 5.3% earlier in October.”
Bankrate Home Lending Expert Linda Bell urged borrowers to look past the headline decision.
“The Fed’s decision to hold the line on interest rates could give borrowers some relief from recent increases in home equity rates, which are at their highest level in two years. Before taking out any loan, make sure you have a good reason to borrow against your home’s value and that you can comfortably afford the payments.”
At Fitch Ratings, Senior Director Eric Orenstein said the origination outlook remains constrained.
“Short-term rates were held flat today but the market expects tighter monetary policy down the line, propping up mortgage rates above 7% for the near term. We expect the smaller origination market in 2027 to limit earnings upside for mortgage companies.”
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