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Rate WatchFed funds 3.75%–4.00%30-yr fixed 7.18%15-yr fixed 6.57%as of

Federal Reserve

Fed meets this week with a rate hike on the table, minutes show

The FOMC convenes Tuesday and Wednesday with the funds rate at 3.50% to 3.75% and mortgage rates creeping up. June's minutes show a committee split on whether the next move is a cut or a hike.

By American Policy WireFiled

Rate WatchAs of
MeasureRate
Fed funds targetFOMC range3.50%–3.75%
30-year fixedFreddie Mac PMMS avg.6.58%
15-year fixedFreddie Mac PMMS avg.5.96%
Sources [1], [3]

The bottom line The Fed meets July 28-29, and its own minutes show officials split between holding or lowering rates and raising them, which is the backdrop for a mortgage rate that has been drifting up.

“Almost all of these participants indicated that some policy firming would likely be warranted.” That line from the Federal Reserve’s June minutes describes what officials would do if inflation stays high, and it is the live question as the FOMC meets Tuesday and Wednesday, July 28-29 [2].

Why it matters: Mortgage rates follow expectations for the Fed more than the Fed’s own rate, and those expectations now run in both directions. In June the committee voted 12 to 0 to hold the federal funds target range at 3.50% to 3.75% [1, 2]. The minutes, released July 8, show members divided over where that range should be by year-end [2].

How we got here: The range has been in place since December 10, 2025, when the FOMC cut by a quarter point on a 9-3 vote. Stephen Miran wanted a half-point cut that day; Austan Goolsbee and Jeffrey Schmid wanted no change [5].

The pressure has since flipped. On April 29 the committee held, 8-4. Miran dissented for a cut, while Beth Hammack, Neel Kashkari and Lorie Logan backed the hold but “did not support inclusion of an easing bias in the statement at this time” [6]. By June, no one dissented [1].

By the numbers

  • 6.58%: The 30-year fixed average in Freddie Mac’s survey for July 23, up from 6.55% the week before and down from 6.74% a year earlier [3].
  • 5.96%: The 15-year fixed average, up from 5.93% the prior week and from 5.87% a year ago [3].
  • 5.98%: The 30-year average on February 26, when it slipped below 6% [4]. It has gained 60 basis points since [3].
  • 4.1% and 3.4%: The 12-month rise in the PCE price index and in core PCE for May, the Bureau of Economic Analysis reported June 25 [7]. The Fed’s goal is 2% [1].
  • 4.3%: The May unemployment rate cited in the minutes, which said payrolls rose “at a solid pace” in the three months through May [2].

Could the Fed raise rates this week? The minutes leave that door open without calling it likely. Most participants described scenarios in which inflation fades and said holding or eventually lowering the range would be appropriate. Most also sketched cases where inflation stays elevated because of AI-related demand, the conflict in the Middle East or tariffs [2].

On year-end, “many” participants saw the right level within or slightly below the current range. “Many other participants” put it above [2]. The June statement said inflation remains elevated, citing supply shocks that include energy [1]. Prices have sped up since spring: staff put April’s 12-month PCE inflation at 3.8% overall and 3.3% core, below May’s readings [2, 7].

Mortgage bonds: The Fed is not adding to its mortgage-backed securities. The June directive tells the New York Fed’s trading desk to reinvest all principal payments from its agency securities into Treasury bills [2]. That leaves the MBS portfolio shrinking as homeowners pay down and refinance loans.

What it means for buyers and owners:

  • A hold is not a cut. The funds rate is an overnight rate. The 30-year average rose 3 basis points in the latest survey with the Fed standing still [1, 3].
  • Wording may matter as much as the vote. A majority of participants saw advantages in shortening the postmeeting statement, and most preferred not to repeat earlier language that suggested an easing bias [2]. That language drew three objections in April [6]. Lenders price loans on where they think the Fed goes next, so a rewritten statement could move rate sheets even if the range holds.
  • Rent and housing costs are cooling, slowly. Fed staff said a gradual decline in the housing services component of inflation was roughly offset by a step-up in other core services [2].
  • Year-over-year, borrowers are still slightly ahead. The 30-year average is 16 basis points below its level a year ago, and the 15-year is 9 basis points above [3].

What’s next: The FOMC announces its decision Wednesday, July 29 [2]. The BEA’s June inflation report follows on July 30 [7].

The other side: Some participants argued inflation would soon head back toward 2%, and several expected the slowdown in housing services prices to keep adding disinflationary pressure [2]. Miran voted for a cut as recently as April [6].

Q&A Quick answers

Q1When does the Fed announce its July 2026 rate decision?
On Wednesday, July 29, the second day of the FOMC's July 28-29 meeting, a date the committee set in June [2].
Q2Is the Fed expected to raise interest rates in July 2026?
No decision had been announced before the meeting, and a hike is not a given. The June minutes show many officials saw the right year-end rate above the current 3.50% to 3.75% range, and almost all said firming would likely be needed if inflation stays high [2].
Q3What were 30-year mortgage rates the week of July 23, 2026?
Freddie Mac put the 30-year fixed at 6.58% and the 15-year fixed at 5.96%, each 3 basis points higher than a week earlier [3].
Q4How long has the federal funds rate been at 3.50% to 3.75%?
Since December 10, 2025, when the Fed made a quarter-point cut. It kept that range at its April and June meetings [5, 6, 1].
Q5Does a Fed hold keep mortgage rates from rising?
No. The 30-year average has climbed from 5.98% in late February to 6.58% while the Fed's target range stayed put [4, 3, 1].