Fed Minutes Show a Divided Board on the Direction of Interest Rates

The Federal Reserve’s minutes last week showed a divided Board. The Fed seems to be split on its dual mandate of full employment and stable prices. So what does this mean for mortgage interest rates in 2026?

Several participants indicated further downward adjustments in rates would likely be appropriate if inflation declines in line with expectations. This view could be supported by the Supreme Court ruling last Friday regarding tariffs. Some participants favored holding rates steady for a while to assess incoming data on inflation. And several of the participants saw no need for additional cuts unless inflation fell firmly toward the 2% target. There were even a few participants who supported language that would allow upward adjustments if inflation remained persistently above 2%.

So, even the smart people at the Federal Reserve are not in agreement on the direction of mortgage interest rates in 2026. What does this mean for people who are starting the home-buying process? Rates have been relatively stable, holding right around 6%. That is down by a whole percentage point from the highs of 7% a year ago. Don’t wait to buy for rates to come down. It may not happen, and in the meantime, home prices continue to rise.

We always say, you date the rate and marry the price! Please contact me if you would like to explore home ownership, stop paying your landlord’s mortgage, and build your own home equity.