Reaction from Fed chair Jerome Powell and from across the mortgage industry
That’s a wrap on our live coverage
3:35 p.m. ET
Thank you so much for joining us for our live coverage of the Federal Reserve rate decision. Before you go, there are a couple more stories posted today that you can check out.
Liezel Once has more reaction to the Fed decision, the latest on mortgage application data from the Mortgage Bankers Association, and news on changes coming to insurance rules from Fannie Mae and Freddie Mac.
I will have another story up shortly with our regular analysis from Melissa Cohn, regional vice president of William Raveis Mortgage.
Powell: No answer for trigger for rate hike
3:31 p.m. ET
When the Bank of Canada held rates earlier today, Canadian central bank governor Tiff Macklem didn’t back away from the possibility that soaring inflation could cause them to consider rate hikes rather than rate cuts.
“The longer the conflict lasts and the wider it gets, the bigger the risks,” Macklem said. “As those risks evolve, as the economy plays out, we’re prepared to respond as needed. We could keep holding the interest rate where we are. If energy prices stay high and we see evidence that it’s generalizing and becoming more persistent, we can raise the policy interest rate to cool inflation.
However, when asked about what it might take for the Fed to consider rate cuts, Powell dismissed the question.
“We’re prepared to do what needs to be done, but I wouldn’t want to hypothesize about what that might be,” Powell said about what might trigger a rate hike.
Powell: Not leaving until investigation is over, unsure after chair term ends
2:57 p.m. ET
Powell was asked if he would remain as the Fed chair if his replacement, presumably Kevin Warsh, was not confirmed right away. Powell confirmed he would.
“If my successor is not confirmed by the end of my term as chair, I would serve as chair pro tem until he is confirmed,” Powell said. “That is what the law calls for. That is what we have done on other occasions, including involving me. And that’s what we will do in this situation.”
Then, Powell went ahead and preemptively addressed whether he would leave the Fed board while he was under investigation, and whether he would leave after his chair term ended.
“On the question of whether I will leave while the investigation is ongoing, I have no intention of leaving the board until the investigation is well and truly over with transparency and finality,” he said. “On the question of whether I will serve as a governor after my term ends and the investigation is over, I have not made that decision yet. I will make that decision based on what I think is best for the institution and for the people we serve.”
Powell: Rate is ‘around the borderline between restrictive and not’
2:52 p.m. ET
In addressing why the Fed is confident that inflation will continue to fall to the central bank’s 2% goal, he termed the current fed funds rates as “in the borderline between restrictive and not.”
“I would say the rate, you can characterize it in the high end of neutral or characterize it as perhaps mildly restrictive, even modestly restrictive,” Powell said. “No one knows for sure. It is in the range where it is somewhere around the borderline between restrictive and not. Remember that a big part of the disinflation we're looking for is just the runoff of when tariffs are put into place.
“We're waiting for that process. It takes eight, nine, 10, 11 months, a year to go through the system. We're waiting for the tariffs, which were put in place over the course of the middle part and late last year. We're waiting for that to go through the system.”
He also discussed how current conditions were putting pressure on both sides of the Fed’s mandate.
“We also think it is important to keep policy mildly restrictive or close to that,” Powell said. “Not too restrictive because of the weakness in the downside risk of the labor market. We're balancing the two goals in a situation where the risks to the labor market or downside, which would call for lower rates, and the risks to inflation are to the upside or higher rates, not cutting.
“We're in a difficult situation. We feel like the framework calls to balance the risks. We feel that where we are now is on the higher borderline of restrictive versus non-restrictive. We feel like that is the right place to be.”
Powell: Move to fewer cuts by more members
2:43 p.m. ET
Powell noted that while the median forecast for rates didn’t change with this meeting, more members now believe that fewer cuts will be needed in future meetings. He said with 19 Fed members offering forecasts, there are plenty of different rationales for each member.
“There are 19 people, 19 reasons, 19 individual submissions,” Powell said. “But, if you notice, the median didn't change, but there was actually some movement toward a meaningful amount of movement towards fewer cuts by people. So four or five people went from two to one, let's say, two cuts to one cut.
“The rate forecast is conditional on the performance of the economy. So if we don't see that progress, then you won't see the rate cut."
He also emphasized that nobody really knows the eventual impacts of the geopolitical turmoil.
“I want to emphasize, nobody knows,” Powell said. “The economic effects could be smaller or much bigger. We just don't know. If we have a long period of much higher gas prices, that is going to weigh on consumption and disposable personal income and consumption. We don't know if it will happen. I wouldn't say there is a conviction that this is going through quickly or not quickly.”
Powell: Middle East developments uncertain
2:37 p.m. ET
Fed chair Jerome Powell addressed the media following Wednesday’s rate decision.
“Today, the FOMC decided to leave our policy rate unchanged,” Powell said. “We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2% inflation goals. The implications of developments in the Middle East for the U.S. economy are uncertain. We will remain attentive to risks to both sides of the dual mandate.”
Powell said they still believe that long-term inflation can get back to the Fed’s 2% goal, but there is uncertainty based on how long the Middle East conflict continues.
“Near-term measures of inflation expectations have risen in recent weeks, likely reflecting the disruptions in oil,” Powell said. “Longer-term expectations remain consistent with the 2% goal. The median for the total inflation is 2.7% and 2.2% next year, a bit higher than projected in December.
“The implications of the events in the Middle East for the US economy are uncertain. In the near term, higher energy prices will push up overall inflation. It is too soon to know the scope and duration of the potential effects on the economy.”
Jerome Powell’s comments
2:30 p.m. ET
Here is the link to the YouTube video where Powell’s comments will air. We’ll transcribe his most notable comments here.
Broker reaction: Waiting to see tone of meeting
2:20 p.m. ET
The early reaction from mortgage brokers is that they’re not surprised the Fed held. Like most, they’re more curious to see what Powell has to say in his comments.
Samantha Shelton, mortgage broker and president of Align Lending, said this rate decision would be one to watch closely, but not because she expected a rate cut.
“This Fed meeting is one a lot of us in the mortgage industry are watching closely, but not necessarily because we expect a major rate cut immediately,” Shelton told Mortgage Professional America. “Inflation has cooled compared to where we were, but it hasn’t come down enough for them to confidently pivot just yet. The Fed has been very consistent in signaling that they’d rather be patient than move too quickly and risk undoing progress.”
Shelton said the tone of the meeting and the comments that come out of it will likely determine how things progress in the market.
“What matters just as much as the decision itself is the tone of the meeting,” she said. “If we start to see more dovish language, acknowledging slowing economic growth or continued improvement in inflation. That’s where the real opportunity lies for mortgage rates to improve.”
She advises other brokers and her clients not to get too locked in on what the Fed does, as mortgage rates don’t move in a one-to-one ratio with the central bank’s fed funds rate.
“For our clients, it’s important to understand that mortgage rates don’t move in synchrony with the Fed,” Shelton said. “In fact, we’ve already seen some improvement in rates ahead of any official cuts, simply based on market expectations. If the Fed reinforces the idea that cuts are coming later this year, we could continue to see gradual easing.
“As a broker, this is where we lean into strategy over timing. Trying to ‘wait for the perfect rate’ can backfire. Instead, we’re helping clients move when it makes sense for their goals, while keeping options open for future refinances as the rate environment improves.”
Her message to brokers is to weather the short-term storm by keeping an eye on the long-term picture in the market.
“I think we’re in a transition phase, moving away from peak rates, but not quite into full relief yet,” Shelton said. “The clients who win in this market are the ones who stay informed, stay flexible, and make decisions based on their long-term financial picture rather than short-term headlines.”
How the Fed voted: Only one vote for a cut
2:12 p.m. ET
Here is the scorecard for how the Fed members voted.
Only Stephen Miran voted to cut the rate at this meeting. He favored a 25-basis-point cut, while everyone else voted for a hold.
Also, the central bank posted its quarterly dot plot. Notable in this is that Fed members expect rates to be higher for longer than in the previous projection. In total, 14 members expected either no cuts the rest of the year, or just one 25-basis-point cut.
March dot plot
December 2025 dot plot
Breaking: Fed announces rate hold
2:00 p.m. ET
The Federal Reserve has officially announced its rate decision. As expected, the Fed has announced it will keep rates steady for the second straight meeting to open the year.
The FOMC announced it was keeping its funds rate steady, keeping rates between 3.50% and 3.75%.
Stay tuned for broker reaction in the next 30 minutes, followed by comments from Fed chair Jerome Powell.
Here is the link to the YouTube video where Powell’s comments will air in 30 minutes.
North of the border: Hold … for now
1:40 p.m. ET
It was another rate hold north of the border in Canada today, as announced by the Bank of Canada shortly before 10 a.m. ET.
Canadian central bank governor Tiff Macklem said that the rising cost of energy caused by the spike in oil prices likely wouldn’t be a short-term issue.
“Risks to economic growth are tilted to the downsides,” Macklem said. “Risks to inflation are tilted to the upside. Economic weakness combined with rising inflation is a dilemma for central banks. Increasing interest rates to slow inflation could further weaken the economy. Easing interest rates to support growth risks pushing inflation well above target.”
Macklem said the Bank of Canada would follow developments closely leading up to its April meeting. He said all options are on the table to deal with the fallout, including potentially raising rates to help curb persistent inflation.
“The longer the conflict lasts and the wider it gets, the bigger the risks,” Macklem said. “As those risks evolve, as the economy plays out, we’re prepared to respond as needed. We could keep holding the interest rate where we are. If energy prices stay high and we see evidence that it’s generalizing and becoming more persistent, we can raise the policy interest rate to cool inflation.
“On the other hand, if energy prices come back down and we see more weakness in the economy, we can lower our policy rate to add more support.”
Comparing US rates to the rest of the world
1:20 p.m. EDT
One of the criticisms of the Fed that President Donald Trump has levied has to do with how the Fed Funds rate compares to central bank rates across the world.
Here is a chart showing how the US Federal Funds rate compares to central bank rates for selected countries around the world:
Uneasiness in the market
1:00 p.m. EDT
Mortgage rates briefly fell into the high-5s, but then moved back into the mid-6s. All of this uncertainty is causing uneasiness with homebuyers, according to Veronique Perrin, real estate agent for Coldwell Banker Warburg.
“The spring market looked promising, but timing is everything,” Perrin told Mortgage Professional America. “The very recent turn of events will most likely be the end of what we had anticipated to be a strong spring market. But, interestingly enough, after a brutal winter, the clients I am currently working with are responding in various ways to the rollercoaster of current events.”
Perrin said even buyers who are well-qualified are choosing to remain on the sidelines.
“There is palpable uneasiness everywhere,” she said. “Several clients who are very qualified and were ready, willing, and able to buy have put their searches on hold. They indicated to me they want to stay ‘fluid’ because everything is so uncertain. They don't want to commit to owning real estate again, or for the first time, and be bogged down by the hassle of cashing out if they want to pick up and leave.”
Welcome to the live blog!
12:37 p.m. EDT
Welcome to our second live blog of 2026 at Mortgage Professional America. Today, we are covering the Federal Reserve’s second rate announcement of the year.
After ending 2025 with three straight 25-basis-point rate cuts, the Federal Open Market Committee (FOMC) decided to hold rates in January, citing a chance to pause and see the effects of those cuts.
Jerome Powell, during his post-announcement press conference in January, discussed the decision.
“Having lowered our Policy Rate by 75 basis points over the course of our previous three meetings, we see our current stance of Monetary Policy as appropriate to promote progress toward both maximum employment and 2% inflation goals,” Powell said.
But things have changed since January’s meeting. War in Iran has driven up the cost of oil, which eventually could make its way into inflation numbers. Meanwhile, despite some good news on the jobs front, some AI-driven layoffs are causing some concern.
This is also leading some industry experts to warn of potential stagflation hitting the market, which is the worst-case scenario for any central bank to deal with, as it happens when both sides of its dual mandate worsen.
We’ll see what the central bank decides to do at 2 p.m. ET today, and we’ll hear from Powell at 2:30. Keep checking in throughout the day for updates!
