What brokers and the Fed will be watching over the next 30 days until the next rate announcement
In 30 days, the Federal Reserve will announce its next rate decision. Undoubtedly, the time between now and then will be filled with more pressure from those wanting a rate cut and more predictions from experts monitoring Fed governor comments and economic data.
Predictions range from the Fed continuing to hold rates once again, as they’ve done in every meeting in 2025, to potentially cutting the Fed funds rate by 50 basis points.
Molly Boesel (pictured top), senior economist at Cotality, isn’t certain what the Fed will do, but does wonder if the central bank will hold true to its word, and hesitate to cut due to rising inflation.
“I'm not sure what the Fed will do,” Boesel told Mortgage Professional America. “I saw those CPI numbers, and they were not encouraging. I'm not even going to put odds on it. We only have a month left till they do it. I think they have a very difficult job ahead of them.”
CME FedWatch, which predicts the Fed's actions based on 30-day Fed Funds future prices, has seen odds fluctuate significantly. After showing a lock for at least a 25 bps cut in September just days ago, it now shows a 16.4% chance of no cut at all.
More inflation data
The July Consumer Price Index (CPI) report showed an increase in inflation, but the increase was largely in line with what experts predicted. That initially boosted chances of a Fed cut.
However, Boesel isn’t so sure that was good news after all. Inflation data over the next 30 days may be the deciding factor for the Fed.
“I think that the one thing they've been saying is they're not going to cut until they see the numbers going in the right direction, and they've really stuck with that,” Boesel said. “They’ll have the PCE come out at the end of the month. So they'll have a few more numbers before their next meeting.”
The market may start to get a clearer picture of what’s going to happen in September coming up this week. On Wednesday, the notes from the last Fed meeting will be released. In addition, Fed chair Jerome Powell will speak Friday at the Jackson Hole Symposium, which could give clues as to the action the chair expects the central bank to take.
Two prominent candidates for Federal Reserve chair publicly advocated for aggressive interest rate cuts, aligning with President Donald Trump’s repeated calls for monetary easing. https://t.co/heFLpHRTtK
— Mortgage Professional America Magazine (@MPAMagazineUS) August 15, 2025
While the Fed has held steady, a weaker-than-expected jobs report has helped cause mortgage rates to slide to the lowest point in 2025. Boesel said a continued decline could bring more buyers and sellers into the market.
“If rates drop a little bit more, you may have some of those borrowers who've been waiting just to get that affordability with the rates,” she said. “I think that's what you're going to see. That rate drop might just open up things for them.”
Other data to watch
Boesel said the Fed will also be keeping an eye on employment numbers in addition to inflation. As for home buyers and sellers, housing inventory will also play a factor in getting the housing market moving.
“I think employment is important because the Fed will want to watch where that’s going,” Boesel said. “Keep your eye on employment and inventories as well. For current owners, if inventories increase, that’s not such a great thing for them in selling and getting a good price on their home. That works in the favor of new buyers.
“Then we’ll see what home prices are in different areas. I think we’re in a nice period now, and it looks like we’re going to have a steady increase in home prices over the next year or so. That’s going to create some stability in the market.”
At a time when data is crucial for economists predicting the Fed's actions, concerns have arisen in the industry regarding the recent termination of Erika McEntarfer, the former head of the Bureau of Labor Statistics. Boesel said economists may have to find alternative jobs data going forward, like the ADP jobs data.
“There's another employment report out there, and I'm going to start tracking a little more,” she said. “It's the ADP report. I think people will be tracking that a lot more closely. It will take a little while to get familiar with how the numbers move in the ADP report. I'm sure they move a little differently, but I think that'll be one that people will watch more closely. I believe it's a public report, so that'll be good.”
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