As it happened: How the Fed reached its latest decision

NOTE: This is a live blog that will be updated frequently. Refresh often for the latest updates.

That wraps up our live blog!

3:15 p.m. ET

As Kevin Warsh wrapped up his first press conference as Fed chair, that is going to wrap up our live coverage. But we've got more reaction for you. Our Fergal McAlinden spoke with Dallas-Fort Worth broker Hunter Bolling of HB Mortgage Team to get his reaction on the latest Fed news. Also, we'll have reaction tomorrow from Melissa Cohn of William Raveis Mortgage. And we'll have coverage of all the fallout from the latest central bank decision.

Thank you all for joining us! We'll do it again in six weeks.

Treasury yields up following rate announcement

3:03 p.m. ET

An hour after the FOMC announcement, the 10-year Treasury yield was up four basis points after being unchanged before the meeting.

The 10-year Treasury yield is most closely tied to 30-year Mortgage rates, which is likely to mean a slight increase in rates.

Short-term Treasury yields have jumped significantly, with the one-year, two-year, and three-year yields up more than 10 basis points. Meanwhile, 20-year Treasury and 30-year Treasury yields were largely flat.

Warsh: ‘We had a good family fight’

3:00 p.m. ET

The new Fed chair pulled back the curtain to show there was likely some spirited debate regarding Wednesday’s decision and the path forward.

“There was one proposal on the table. There was no discussion of any other proposals,” Warsh said. “The discussion on that proposal, I would say, was quite limited. The group was unanimous and unambiguous on it. It has been the practice of this central bank and others to have a range of alternatives. Today we had one. I thought it furthered the discussion, deepened it, and made it clear what we needed to do and how we needed to deliver.

“I wouldn't prejudge what happens in the future. There was only one big subject for us. We took it on. We had a good family fight on it for a couple of days. And we ended up in a better place.”

Economist reaction: Tone more hawkish

2:54 p.m. ET

Mike Fratantoni, Mortgage Bankers Association senior vice president and chief economist, shared his thoughts on the Fed’s announcement.

“The FOMC kept its target rate unchanged, but the economic projections released today have shifted markedly relative to the projections in March, with the median member’s projection showing much higher inflation in 2026 and somewhat higher inflation in 2027,” Fratantoni said. “Not surprisingly, with elevated concerns about inflation and little sign of deterioration in the job market, the median member now projects an unchanged fed funds rate this year, but still expects some cuts over the next two years.

He said the tone of the Fed appears to have changed, and he expects rates to stay elevated in the near future.

“The overall tone is more hawkish than many had anticipated, and the immediate market reaction was an increase in rates,” Fratantoni said. “MBA’s forecast is for mortgage rates to average about 6.5% over the forecast horizon, given the resilience in the broader economy and job market, the likely stance of monetary policy given persistent inflation, and ongoing fiscal pressures, which will keep upward pressure on longer-term debt.”

Warsh: ‘I expect more changes to come’

2:50 p.m. ET

The new Fed chair was asked whether he would continue press conferences after the FOMC rate decisions.

“Press conferences can be a very useful way to communicate with households, businesses,” Warsh said. “My mentor's mantra was that press conferences are useful, but when you have one, you want to make sure you have something important to say. We have something important to say about our commitment to deliver on price stability, our commitment to rethink practices with an eye to moving the Fed forward, and to give you and the American people a sense that these aren't idle thoughts.”

Part of what will determine future press conferences will likely revolve around what news the Fed chair has to share.

“These are concrete thoughts that we are going to seek out the best minds, both the best thinking inside of the Federal Reserve, and the best people I know in business and economics, and the academy, and technology, and the rest, to share their views,” Warsh said. “That's what we're going to be doing in the pursuit of truth.

“I think we're going to come up with new and interesting things. We made some changes today. I expect more changes to come. And some of those might well be worthy of a press conference.”

Warsh on inflation and what the Fed will do

2:44 p.m. ET

Warsh was asked about how the Fed will approach elevated inflation.

“First, we have the capability and commitment to deliver on our price stability objective of 2%. That's what we're going to do,” Warsh said. “In the Fed's review of its strategy over the last number of years, in January, the Fed, including the strategy that we're still bound by, the Fed statement says that inflation is primarily determined by monetary policy. You bet it is. I've said for years that inflation is a choice. You bet it is.”

He was also asked if the Fed would take action, like raising rates, to bring inflation in check. Citing his plan to avoid forward guidance, he declined to promise any plan on rates.

“Your question sounded like an encouragement for me to give forward guidance,” Warsh said. “We've dropped forward guidance. Some along the committee dropped it, I suspect, from our discussion the last couple of days, because they said at this moment in time, it doesn't feel as though providing forward guidance is right.

“Others have, I'd say, different views and think as a general proposition, forward guidance isn't the business we should be in. But that will be taken up by the task force on communications. And my policy maker colleagues, we're going to listen hard to what the experts say and make our own decision. But I can't give you any forward guidance about what we're going to do next. The good news, we'll meet in six weeks.”

Even though the dot plot showed that Fed members would be open to a rate hike later in the year, Warsh said he wasn’t sure that was written in pen by those committee members.

“I reviewed the dot plots. And when I saw the submissions, I noted that all the submissions were coming in with pencils; those kind with the big erasers,” Warsh said. “That's to say that I think my colleagues around the table, when they submitted their dots, understand the world is changing quite quickly. And they didn't feel bound by them six weeks from now or six days from now.

“What I heard around the table was, as they submitted their forecasts, to be clear, they weren't; this was more likely than not. This was more likely than their other scenarios. So I didn't hear tons of conviction. What I heard was the kind of humility that I think we should have.”

Warsh: Changes, and new task forces

2:39 p.m. ET

Warsh explained that while he encouraged members of the FOMC to submit their dot plot information, he refrained.

“It's been the practice of this committee for participants to submit these,” he said. “I have encouraged my colleagues to do so. I, however, refrained from offering any projections of my own, consistent with my long-held views on the SEP, at least as currently structured.”

He also announced five new task forces to try to improve things at the Fed.

“Let me turn now to a few words on a key initiative that we're announcing today,” Warsh said. “I'm appointing a task force in each of five areas that are central to the broad conduct of monetary policy – first, Fed communications. Second, the Fed's balance sheet. Third, our use and reliance on existing data sources. Fourth, productivity and jobs in an era of transformation. And last, the Fed's inflation frameworks.

“These subjects are timely, consequential, and worthy of a fresh look. My colleagues and I discussed them with energy and purpose over the last couple of days. For each of these independent task forces, I'm enlisting some of the very best minds, both inside and outside the economics profession. They will be supported by subject matter specialists from our superb Fed staff. And they'll have a straightforward charge -- start with first principles, ask hard questions, examine current practice, consider alternatives, and ultimately propose next steps for policy-maker consideration.”

Warsh: Goal is to get ‘monetary policy right’

2:35 p.m. ET

Kevin Warsh gave his first statement after announcing that the FOMC would hold rates steady. He said the goal of the central bank hasn’t changed.

“This week's FOMC meeting exemplified the very best of the Fed's traditions – rigorous debate, open-mindedness, commitment to mission, responsibility, and accountability for performance,” Warsh said. “In this business, they all add up to one thing: getting monetary policy right, or as near to it as we can do. That is our north star.”

He also noted that the economy has continued to stay strong despite challenges with high prices.

“Economic activity is expanding at a solid pace despite elevated uncertainty that owes in part to the conflict in the Middle East,” Warsh said. “Productivity growth and capital investment are both strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. We recognize that inflation has been running well ahead of the Fed's long-stated inflation goal of 2%. That's been going on for more than five years.

“Persistently high prices are a burden for the American people. But the recent past need not be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.”

Kevin Warsh’s comments

2:28 p.m. ET

Here is the link to the YouTube video where Warsh’s comments will air. We’ll transcribe his most notable comments here.

Summary of the Fed data release

2:28 p.m. ET

In addition to the dot plot, the Federal Reserve released more data as part of the rate decision announcement. See the chart below for a summary of that data.

Broker reaction: No real surprises

2:26 p.m. ET

Fif Ghobadian, senior vice president of mortgage lending at OriginPoint, said the news from the Fed was largely expected.

“I think they're more cautious about what's going to happen with the Iran-US oil situation,” Ghobadian said. “We're waiting to see what that does. The Fed, we were expecting no change, and the fact that they're going to be a little less transparent about what's happening with their decisions was also kind of expected. So there were really no surprises. I think the biggest surprise with rates is going to be once a treaty or agreement is signed between Iran and the US.

Oil prices have started to retreat, which could be a good first sign for eventual inflation and mortgage rate relief.

“The fact that oil prices have already dropped to $75 a barrel is a very big step in the right direction,” Ghobadian said. “We already saw an improvement this week with the potential of the agreement coming through on Friday. We saw a little bit of a release in rates, hovering towards 6.7%, and now we're closer to 6.2% or 6.3%, which is much better.”

Economist reaction: Inflation driving decisions

2:20 p.m. ET

In the end, the elevating inflation made the challenge difficult for the central bank, according to Selma Hepp, chief economist for Cotality.

"Despite ongoing pressure on the Fed to ease ahead of the midterms, inflation remains the primary driver of policy decisions,” Hepp told Mortgage Professional America. “While we expect administrative focus to zero in on housing affordability again—likely through increased incentives as sales continue to disappoint—elevated costs and borrowing rates will persist.”

She said that no matter what the Federal Reserve decides to do with its policy going forward, meaningful rate relief will likely hold off until inflation and Treasury yields start to fall.

“Importantly, regardless of Fed action, mortgage rates are unlikely to fall meaningfully until inflation cools and long-term yields move decisively lower," Hepp said.

Broker reaction: Not expecting major changes

2:17 p.m. ET

Glen Weinberg, COO and partner at Fairview Commercial Lending, told our Fergal McAlinden that the announcement was what he expected.

“Rates held steady, which is what I had expected,” Weinberg told Mortgage Professional America. “Warsh has come out and said that he wants less messaging, which will be interesting to see how it shakes out. My gut says that nothing much is going to change in the second half regarding interest rates, other than they could head higher.

Because the economy has been chugging along despite headwinds, he doesn’t see an end to the conflict in the Middle East changing things much.

“I don’t think the Iran war ending will have a big impact on the US economy, as it is already performing well, which basically takes cuts off the table,” he said.

Broker reaction: ‘Cautious optimism’

2:15 p.m. ET

Count Samantha Shelton, mortgage broker and president of Align Lending, among those not surprised about the Fed’s decision to hold rates today.

“I don’t expect any major surprises at this meeting, to be honest,” Shelton told Mortgage Professional America. “I think they’re going to hold rates steady and spend more time kind of evaluating that data before making any significant moves.”

What Shelton is looking for is how the Fed communicates the rate hold. We should find out more at the bottom of the hour when Kevin Warsh speaks. Shelton will be among those listening closely.

“What I’m most interested in isn’t necessarily what they do, but kind of how they communicate it,” she said. “We’ve been, as an industry, craving consistency and clarity. And as mortgage professionals, we’ve spent a lot of the last few years helping clients navigate this uncertainty. And uncertainty is often more damaging than the actual rate environment itself.

“So during this first meeting, it’s a great opportunity for Warsh to establish confidence. If he can provide the American people a clear vision of how the Fed plans to approach things like inflation, employment, future rate decisions, I think that is a win regardless of whether rates move at all today.”

Homeowners and potential homebuyers don’t need to wait for economic data to be released to know how challenging things have been lately. Gas prices have spiked, and that has trickled down to everyday items. Shelton hopes the Fed can acknowledge the struggles those people are going through.

“I would love to hear him acknowledge kind of what the everyday Americans are feeling,” she said. “When we look around, people aren’t looking at inflation reports. We’re looking at the cost of groceries, insurance, our housing, and whether homeownership still feels attainable. And I think that confidence comes from hearing that the Fed understands that affordability matters across the board.”

While brokers have tools in the toolbox for every rate environment, Shelton said having more certainty about where things are going and some idea of when things are going to get better would help everyone.

“I want to hear that there is commitment to being data-driven and transparent, so borrowers don’t need to have promises,” Shelton said. “They need confidence that decisions are being made thoughtfully and that there is a plan. As mortgage brokers, we have solutions for every market. What helps serve clients best is stability and predictability.

“But if consumers feel like there is a path forward, they’re more likely to move forward with confidence than with the uncertainty that we’ve experienced the last handful of months.”

As for what the rest of 2026 holds, especially with Warsh in charge, Shelton is hopeful that there can be signs that things might improve in the second half of the year.

“I would say that I’m cautiously optimistic,” she said. “I think that one thing I always remind my clients is that mortgage rates don’t move at the same pace as the federal funds rate. So there are a lot of factors at play here. If Warsh can create more certainty about where we’re headed and continue making progress on inflation without creating unnecessary disruption, I think there are opportunities for rates to improve throughout the remainder of 2026, for sure.”

Dot plot: A hawkish turn for the Fed

2:10 p.m. ET

While we didn’t get a breakdown of how the committee voted, we did get an updated dot plot which favors one rate hike in 2026.

Breaking: Fed announces rate decision

2:00 p.m. ET

The Federal Reserve has officially announced its rate decision. The Fed has announced it will keep rates steady for the fourth straight meeting to open the year.

The FOMC announced it was keeping its funds rate steady once again, keeping rates between 3.50% and 3.75%.

Stay tuned for broker reaction in the next 30 minutes, followed by comments from new Fed Chair Kevin Warsh.

Here is the link to the YouTube video where Warsh's comments will air in 30 minutes.

North of the border: Hold last week, but cuts could come

1:40 p.m. ET

Unlike in recent meetings, the Bank of Canada held its rate decision meeting a week before the Federal Reserve. However, like the Fed is expected to do in 20 minutes, it held rates once again.

The Bank of Canada held its trendsetting interest rate at 2.25%, keeping that number steady for the fifth consecutive meeting.

Governor Tiff Macklem said if there ends up being a trade war with the US because of the soon-expiring USMCA, the Bank of Canada may have to consider rate cuts to help the country absorb some of the effects.

"If the United States imposes significant new trade restrictions on Canada, we may need to cut the policy rate further to support economic growth," Macklem said.

However, if energy prices remain high, a rate hike isn’t out of the question either.

"Alternatively, if the conflict in the Middle East continues and higher energy prices start leading to ongoing generalized inflation, monetary policy will have more work to do – there may be a need for consecutive increases in the policy rate," Macklem said.

The Bank of Canada will announce its next rate decision on July 15, two weeks before the next Fed decision on July 29.

Keep an eye on: 10-year Treasury and forward guidance

1:30 p.m. ET

Here are two things that are worth keeping an eye on today:

The first is what the 10-year Treasury yields do in the aftermath of both the rate decision and Kevin Warsh’s comments. As of right now, the 10-year is largely flat for the day.

The 30-year mortgage rate is closely tied to the 10-year Treasury, so we’ll keep an eye on which way it moves, if it moves at all, later today.

The second is forward guidance. There have been rumblings that Warsh may not participate in the dot plot, as he has mentioned reducing forward guidance. Getting away from forward guidance allows the Fed to avoid the perception of locking itself into future rate decisions if the data doesn’t back up that path.

While we’re waiting to see what happens, here’s a chart of the Fed funds rate since 2010. This reflects the actual overnight funds rate rather than the range that the central bank operates within.

Comparing US rates to the rest of the world

1:20 p.m. EDT

Here is a chart and an interactive map showing how the US Federal Funds rate compares to central bank rates around the world:

Fed Preview: A hike ‘not unthinkable’

1:00 p.m. EDT

This is likely not what Kevin Warsh or the White House were hoping would be the circumstances when Jerome Powell’s term as chair came to an end.

Nevertheless, the current inflation environment is the hand the new Fed chair has been dealt, which will make a rate cut in the short term difficult.

Odeta Kushi, deputy chief economist at First American, believes a hold is in the cards.

"My baseline expectation is a hold," Kushi told Mortgage Professional America. "Inflation has moved higher, but much of the recent acceleration has been driven by energy prices, while the labor market is showing signs of stabilizing. The Fed doesn't need to rush into rate cuts, but it also doesn't have enough evidence yet to justify a hike.

“The key question is whether the recent inflation shock proves temporary or begins to spill over into broader prices and inflation expectations. Until that becomes clearer, holding is the path of least regret."

The question will be what happens to inflation next and how that impacts Warsh’s road forward. There is hope that a ceasefire in the Middle East could bring energy prices back down, which could allow the central bank to consider rate cuts again in the future.

However, until there is a reduction in inflation, cuts are harder to justify. In fact, Kushi said a rate hike is no longer off the table.

"A rate hike is not inevitable, but it's no longer unthinkable," she said. "Earlier this year, the market's base case was that the Fed would be cutting rates. Today, the conversation has shifted toward how long rates may need to remain elevated and whether inflation risks could eventually require a different policy response."

As for what Kushi is looking to hear from Warsh at 2:30 p.m. ET today, she wants to hear what framework he will put in place that will differ from what Powell was doing.

"Beyond the policy decision itself, I'll be paying close attention to the framework Chairman Warsh uses to interpret the data," she said. "Every Fed chair inherits inflation, labor market, and growth data. What matters is how they think about uncertainty, risk management, and the tradeoffs within the dual mandate.

"I'll be listening for signals about his reaction function. The first meeting is often about establishing a framework for how policy decisions will be made going forward."

Welcome to the live blog!

12:45 p.m. EDT

Welcome to our fourth live blog of 2026 at Mortgage Professional America. Today, we are covering the Federal Reserve’s fourth rate announcement of the year.

Today marks the first rate decision announced with Kevin Warsh as Fed chair. He has been tasked by the White House to try to cut rates to lower borrowing costs, but he walks into a difficult situation. Members of the Fed have been hyper-focused on high inflation, which makes the chances of a rate cut unlikely.

CME FedWatch took any chance of a cut off the board leading up to the meeting, with only 0.4% chance of a 25 basis point rate hike.

Today likely isn’t about the rate decision, but what we find out about how Warsh is going to run the central bank in contrast to his predecessor, Jerome Powell, who remains on the board.

This is going to be a fascinating day. We’ll break everything down leading up to the 2 p.m. rate decision announcement. Then we’ll have broker and economist reaction afterwards, followed by Warsh’s comments at 2:30 p.m. Refresh often for the latest news!