Greg Grapsas, Mortgage Analysis Group

Greg Grapsas, Mortgage Analysis Group The mission of the Mortgage Analysis Group is to assist clients in identifying the optimal type of mortgage that best fits their needs.

To assist borrowers in identifying the most appropriate mortgage type and for existing borrowers, to determine if a refinance will benefit them.

09/16/2026

The FOMC met today and voted 12-0 to raise short term interest rates 1/4 % to a range of 3.75 to 4.00 % . The hike was implemented in an effort to reduce the current inflationary pressures on the economy. At least one additional hike is expected later this year. This is what the "street" has wanted for some time.

Consensus is that this was an appeasement measure to soothe the bond market which has experienced increased rates this year. The 10 yr bond topped 5 % briefly this week for the first time since 2023. Unfortunately, there is a belief that this rate increase cannot cure the cause of this inflation. Traditionally, interest rates are increased to chill an overheated economy and high demand. That is NOT the cause of the current inflation jolts. These are attributed primarily to the spike in oil prices as a result of the war with Iran that has created supply shortages. To be sure, products that are delivered by trucks and other forms of transportation will still be delivered in the same quantities as before. Until the supply side of the economy returns to normal, small interest rate increases will be of little value. Moreover, nothing the Fed did today will substantially affect the current level of products that must be imported at higher costs caused by tariffs.

The next Fed meeting will be held on October 27-28, 2026.

07/29/2026

The FOMC met today and voted to continue to keep the short-term Fed Funds Rate unchanged at the current target range of 3.50 to 3.75 %. However, the vote was 9-3 with 3 members voting to INCREASE rates 1/4 %. Those supporting the increase have cited the continued war with Iran and resulting disruption of oil supplies as the proximate cause for their vote...an astute observation to be sure. Depressed equity markets turned positive on the announcement of no rate increase.

Despite the supply shock issues, the economy continues to expand at a solid pace. Productivity and capital investment remain strong. Unemployment has changed little and job gains have been constant. However, it should be noted that the June jobs report and the Personal Consumption Expenditure measures of inflation will not be released until tomorrow morning.

Fed chair Warsh made a statement citing the Fed's commitments to low inflation and low unemployment. He indicated that one key reason for keeping rates unchanged for now was the fact that the bond market itself raised rates since the last Fed meeting. A question and answer period followed and the takeaway was that the Fed will watch the markets and the economic data before making any decision to change interest rate policy.

The next Fed meeting will be held on September 15-16, 2026.

04/29/2026

The FOMC met today and once again, 11 members voted to keep rates unchanged at the current target range of 3.50 to 3.75 %. One member, Trump appointee Stephen Miran, again voted to cut rates ¼ %. However, three of those eleven members (Beth Hammack, Neel Kashkari and Lorie Logan) who supported the current target range did not support inclusion of an easing bias in the statement at this time. That dissent is a rarity and indicates that these three dissenters may see the possibility that a more neutral bias has begun to form. Powell stressed that it does not mean that they will support rate hikes.

The Committee continues to seek to achieve maximum employment while reducing inflation to 2 % per year. As economic and political events often do, that goal currently remains aspirational.

During Chairman Powell’s comments and questioning period, he stressed that the economy is continuing to grow at a solid pace. However, job growth is slow and inflation is somewhat elevated. When asked why he plans to stay on as a member of the Board of Governors and the Open Market Committee after his term as Fed Chairman expires, he expressed his concerns over unprecedented interference by the Administration. Central banks should never be subject to political influence and countries where governments interfere with the banking system do not thrive compared to those where there is no interference. To that end, he will stay on as a governor to ensure that Fed independence is maintained. Nevertheless, he will keep a low profile and defer to the new Fed Chair Kevin Warsh. Again, Powell's term as Fed governor will expire in January 2028

The next Fed meeting will be held on June 16-17, 2026 and will be chaired by Kevin Warsh..

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