A mortgage industry insider has a bold take on rates — and it might surprise you
The Federal Reserve's most closely watched rate decision of 2026 is hours away, and one veteran mortgage professional is making the case that the move borrowers fear most could actually ease the market.
With the 30-year fixed mortgage rate now at 7.12%, up from 6.75% just weeks earlier, Melissa Cohn, Regional Vice President of William Raveis Mortgage and a 44-year industry veteran, said that the Fed not only can raise rates — it should.
"I think the Fed should be in a position to raise rates at this point," Cohn said.
"Inflation is clearly going in the wrong direction, oil prices are surging, and there's no immediate sign of a positive change in inflation figures. It's likely to get worse before it gets better."
The Federal Open Market Committee (FOMC) opened its September 15–16 meeting Tuesday morning in Washington, with a rate decision expected this afternoon.
Futures markets as of September 14 were pricing in roughly an 87% probability of a 25-basis-point hike, according to the CME FedWatch Tool.
The rate increase pressure building inside the Federal Open Market Committee had been months in the making, crystallized when three board members dissented in favor of an immediate hike at the July meeting.
The inflation-over-unemployment argument
Cohn's case rests squarely on the Fed's dual mandate and the current state of both sides of it.
"The Fed needs to make sure that everyone understands that they maintain their dual mandate, and that inflation is more important right now than unemployment, because we've seen solid jobs numbers," she said.
"They need to put a lid on inflation and raise rates."
The August jobs report, which showed 162,000 payroll gains with the unemployment rate holding steady at 4.1%, gave policymakers little room to cite a softening labor market.
A stronger-than-expected jobs report is putting a September Fed rate hike back in focus.
— Mortgage Professional America Magazine (@MPAMagazineUS) September 4, 2026
The US economy added 162,000 jobs in August, with unemployment holding at 4.1%, prompting renewed discussion about the Federal Reserve's next policy move.https://t.co/B0iBjDoGsY
For brokers who watched the four straight weeks of 30-year mortgage rate increases before the July FOMC meeting, the pattern underscored how quickly the bond market moves ahead of Fed signals.
Mike Fratantoni, Senior Vice President and Chief Economist at the Mortgage Bankers Association (MBA), told Mortgage Professional America in July that the 9-3 split vote to hold was a clear leading indicator.
"The three dissents at this meeting, with each of these dissenting members preferring to hike rates now, indicates that the Fed is likely moving into a hiking cycle soon," he said.
Cohn offered a counterintuitive argument on what that hike could mean for mortgage pricing.
"In 2025, when the Fed was cutting rates, mortgage rates went up," she said.
"So, who's to say that in 2026, if the Fed raises rates, that mortgage rates can't come down?"
Buyers adjust as affordability narrows
The real estate market, Cohn said, is not frozen, but it is strained. As September hike odds surged when oil prices topped $100 a barrel in July, originators began fielding more demand for alternative loan structures.
"It's crazy what's going on, but there are people who still need to buy houses," Cohn said.
"People are moving forward, even if they're unhappy with where mortgage rates are, knowing they'll have to refinance. They're considering alternatives such as an adjustable-rate loan or an interest-only loan, and if a loan carries a prepayment penalty, they're minimizing it so they can refinance when rates settle back down. Every eighth of a percent higher on a rate is another group of buyers that don't qualify. People are going to have to downsize their expectations."
Stay tuned tomorrow for all our coverage of the Federal Reserve’s much-anticipated decision – and make sure to subscribe to receive all the biggest mortgage news of the day here.
