The Federal Reserve wrapped up its July meeting this past week with a decision that’s becoming routine: no change to interest rates.
For the fifth meeting in a row, the Fed held its benchmark rate steady at 3.50%–3.75%. Effectively, this created no change or shifts in the market.
Here’s what’s actually going on — and what it means if you’re trying to buy, refinance, or just figure out which way rates are headed.
Why didn’t they cut?
Inflation is still above the Fed’s 2% target and has been for over five years. So even though the economy looks reasonably healthy — steady job growth, strong productivity, nothing obviously on fire — the Fed isn’t willing to loosen the reins just yet.
They’re waiting for more evidence that inflation is actually under control before they propose rate relief.
The vote wasn’t unanimous.
Three regional Fed presidents dissented—and not in the direction you’d hope. The dissenters from Cleveland, Minneapolis, and Dallas wanted to raise rates (it is the most dissent in one direction since September 2016).
What does this mean for mortgage rates?
Waiting for the “perfect” rate is a strategy that costs most people more than it saves. The smarter play is understanding what’s available now, structuring the loan correctly, and moving when the numbers make sense for you.
The bottom line
If it makes sense to purchase or refinance, then interest rates should not be a barrier to move forward, as there will always be opportunities to refinance. The issue with waiting for a perfect rate is that the clock does not stop. Home prices do not freeze. If the deal makes sense now, that matters more than what the Fed might do in the Fall. If you have any questions, give us a call at (760) 930-0569.
