The Federal Reserve kept the federal funds rate exactly where it is at 3.50%–3.75%. This is the second meeting in a row they’ve held steady after the cuts we saw late last year. The vote was 11-1, with one governor pushing for a cut, but the majority voted for no cut. In their updated projections (the dot plot), they’re still looking at just one rate cut for the rest of 2026 and maybe another in 2027. They did bump up their 2026 inflation forecast, with core PCE now at 2.7%.
Fed Chair Powell stated that’s inflation is still “somewhat elevated” and not coming down as fast as hoped. He called the economic implications of the Iran situation “uncertain,” and noted that higher energy prices from everything going on over there are already pushing near-term inflation expectations up. Regarding tariffs he said those could be more of a one-time thing. Bottom line: the Fed’s in full wait-and-see mode. No hikes are the base case, but they’re not rushing to cut either.
On the inflation front, this morning’s Producer Price Index (PPI) for February came in hotter than expected. Wholesale prices jumped 0.7% for the month (above the 0.3% forecast) and the yearly rate hit 3.4% (versus 2.9% expected). Core PPI climbed to 3.9%, its highest since early 2023. This data doesn’t even fully capture the Iran-related energy spikes yet, so it’s adding real pressure and pricing out some of those hoped-for rate cuts. Stocks took a hit, down more than 1% on the combo of hot PPI and Middle East tensions.
So what does all this mean for mortgage rates? The national average 30 year mortgage rate is sitting at 6.36% (up about 7 basis points today). The 15-year fixed is at 5.97%. The bond market (especially the 10-year Treasury yield hovering around 4.1%–4.2% which has a corresponding impact on mortgage rates) got hit by the oil surge and inflation worries.
Refi demand dropped again, which makes sense when rates are bouncing like this.
On the housing side, we got some mildly positive notes. Pending home sales rose 1.8% in February and builder sentiment increased but affordability is still tough, and supply remains tight.
Today’s national average 30-year mortgage rate is 6.36%
