Key Takeaways
The Fed Holds Steady After a September Hike
The Federal Reserve left its benchmark rate alone today.
The Federal Open Market Committee (FOMC) voted to keep the federal funds target range at 3.75%–4.00% — the same range it set in September, when the Fed raised rates by a quarter point.
So this is a pause, not a pivot. But it’s a pause with teeth.
The vote was 10-2. Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack dissented — not because they wanted a cut, but because they wanted another 25 basis point (0.25%) hike.
What does that mean for you if you’re shopping for a mortgage?
Not much drama today. The 30-year fixed sits at 7.35% in intraday pricing from Mortgage News Daily, right in line with the 7.32% weekly average Freddie Mac reported in its Primary Mortgage Market Survey for the week of October 22. That was down from 7.40% the week before.
Mortgage rates don’t take their cues directly from the Fed’s benchmark rate. They follow the bond market, which had largely priced in a hold going into the meeting. Two members nevertheless voted for a hike, so another increase remains possible if inflation or employment data run hotter than expected. That’s why rates aren’t swinging hard in either direction right now.
But rates in the mid-7s aren’t cheap. The 30-year is up more than a point from a year ago, when Freddie Mac’s weekly survey had it at 6.19%. If you’ve been waiting for a signal to act, a steady Fed with two hawkish dissenters is worth paying attention to.
Why the Fed Held Steady (and Why This Isn’t Dovish)
Inflation is still too hot. That’s the short version.
Consumer prices rose 3.7% over the past year, according to the latest CPI reading from the Bureau of Labor Statistics. That’s well above the Fed’s 2% target. (A note on apples and oranges: the Fed’s formal 2% goal is measured with the PCE price index, while CPI is the more widely followed gauge.)
The job market isn’t giving the Fed much cover to ease, either. Unemployment ticked up to 4.2% in September from 4.1% in August — not alarming, but not a reason to cut rates either.
Here’s the key passage from today’s statement:
“Economic activity is expanding at a strong pace. [...] Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated.”
The Fed also said:
“The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”
In plain English, the Fed is saying the economy is running hot, prices are still rising too fast, and it’s going to keep leaning on inflation until it hits 2%.
One small but telling change: in September, the Fed described activity as expanding at a “solid” pace. Today it upgraded that to “strong.” That’s not Fedspeak for “we’re about to cut.” If anything, it’s Fedspeak for “we’re not done fighting inflation.”
And then there are the dissents. Two voting members — Cook and Hammack — wanted to hike by another quarter point today. No member voted for a cut. That tells you where the committee’s center of gravity sits right now.
For rate shoppers, the takeaway is simple. The Fed held, but the posture is hawkish.
Where Do Mortgage Rates Go From Here?
The Fed’s next meeting is December 8–9, 2026. That meeting also brings updated economic projections, which markets will pore over for signals on where rates go in 2027.
Between now and then, two numbers will drive everything: inflation and jobs.
Here’s how it could play out.
Scenario 1: The Fed holds steady again. With CPI at 3.7% and the labor market still firm, the Fed has a reasonable case to stand pat at its next meeting. In that case, mortgage rates could stay in a fairly narrow range, though new economic data can still move them.
Scenario 2: Another hike is possible. Two members already voted for a hike today. If the next CPI reading surprises higher or job gains stay strong, the committee could move in December. For illustration, on a $300,000 fully amortizing, 30-year fixed-rate mortgage, increasing the interest rate from 7.35% to 7.60% increases monthly principal and interest by about $51. This excludes taxes, insurance and fees and is not a loan offer.
Scenario 3: Inflation cools and the Fed cuts. If inflation cools meaningfully toward the Fed’s 2% goal and unemployment keeps drifting up, cuts come back on the table — but with inflation at 3.7% and the Fed calling it elevated, that would take sustained progress. Using the same assumptions, decreasing the interest rate from 7.35% to 7.10% reduces monthly principal and interest by about $51, or roughly $610 over 12 months. This excludes taxes, insurance and fees and is not a loan offer.
The honest answer? No one knows which scenario wins. But with inflation still elevated and two votes for a hike, today’s decision doesn’t point to cuts coming soon.
If you’ve found a rate and payment that fit your budget, locking can protect you from further increases. Floating carries the risk that rates move higher before you close.
What Are Today’s Mortgage Rates?
The 30-year fixed sits at 7.35% as of this writing, according to Mortgage News Daily. That’s up from 6.19% a year ago (Freddie Mac weekly average), but still below the 7.79% Freddie Mac weekly average from late October 2023. For historical context, Freddie Mac’s weekly survey had 30-year rates near 3.14% in late October 2021 — a different world.
Markets can change without notice on the next piece of economic data. If you’ve found a rate and payment that fit your budget, a rate lock can protect against increases during the lock period, subject to the lender’s terms and unchanged application details. Floating means your rate could rise or fall before you lock. A lock may prevent you from benefiting from falling rates unless a float-down option applies, and extensions may cost extra.
Mortgage rates cited in this article are market benchmarks from Mortgage News Daily and Freddie Mac, as identified in the text—not offers from The Mortgage Reports or its lending partners. Actual borrower rates, APRs and terms vary by lender and borrower circumstances. Rates and terms are subject to change without notice. The Mortgage Reports does not endorse any specific lender. NMLS #1660690.
