Fed Day: Warsh’s First Decision and What It Means for Your Mortgage Rate

Today the Federal Reserve held its first rate decision under new Fed Chair Kevin Warsh.

The FOMC voted 12–0 to hold the federal funds rate steady at 3.50–3.75%, and the real story turned out to be exactly where we expected: not the number, as it was widely anticipated there would be no change to rates, but how Warsh ran the meeting and what he said afterward.

What Happened

The Committee’s statement kept things straightforward: economic activity is expanding at a solid pace despite elevated uncertainty tied in part to the conflict in the Middle East, job gains have kept pace with the workforce, and inflation remains elevated relative to the Fed’s 2 percent goal, driven in part by supply shocks including energy prices. The vote was unanimous, a notable contrast to the more divided votes we’ve seen from the Fed over the past year.

The bigger news came out of the press conference. My first impression of Chair Warsh: his style is direct and steady — clear, fresh, and to the point, a real departure from what we’re used to hearing from a Fed Chair. A few things stood out:

• He’s dropped forward guidance. Warsh was explicit that he doesn’t want markets leaning on what the Fed says about future moves — he wants decisions driven by data as it comes in, not by signals the Fed telegraphs in advance.
• He withheld his own dot. The Fed still released its quarterly “dot plot” — the chart showing where each FOMC participant expects rates to head — but Warsh chose not to submit his own projection, breaking with 14 years of precedent under his predecessors. The other 18 participants still submitted theirs, clustered mostly around 3.25–4.25% for 2026, without a clear signal toward additional cuts.
• He’s launching a task force to review how the Fed makes decisions. The goal is to bring in new data sources and reexamine the existing ones, since several of the economic reports the Fed has historically relied on tend to look backward rather than reflect what’s happening in the economy right now. I think this is a genuinely good move — policy based on the rear-view mirror has been a long-standing criticism of the Fed, and it’s encouraging to see a new Chair take it on directly.

What This Means for Your Mortgage Rate

Here’s the part worth repeating every Fed Day: the Fed Funds Rate doesn’t set your mortgage rate. Today is a perfect, real-time example. The rate decision itself was a unanimous, fully-expected hold — about as “no surprise” as a Fed decision gets. And yet, as I write this, mortgage-backed securities (MBS) are down 40+ basis points (as of 12:28 PT) following the press conference. That move is coming from Warsh’s tone and his shift away from forward guidance, not from the rate decision itself.

That MBS move was significant enough that we issued lock alerts to clients this afternoon. If you’re in the middle of a purchase or refinance and haven’t locked yet, this is exactly the kind of afternoon where reaching out before the market settles matters.

If you want the fuller explanation — why mortgage rates sometimes move opposite the Fed, and what actually drives mortgage pricing — I covered it in detail here: Does the Fed Control Mortgage Rates? What Buyers and Homeowners Need to Know.

If You Haven’t Locked Yet

Days like today are a good reminder of how quickly mortgage pricing can shift even when the Fed’s decision itself is a non-event. If you’re mid-transaction and want to talk through whether locking now makes sense for your situation, reach out and I’m happy to walk through it with you.

Rhonda Porter · Licensed Mortgage Advisor · NMLS #121324 · Washington State

Updated 12:28 PM PT with the confirmed decision and press conference details