Instant Reaction: Fed Announcement, June 17, 2026

By: Lawrence Yun

Mortgage rates can change even if the Federal Reserve policy does not change. The longer-term interest rates, including mortgage rates, are partly determined by future inflationary pressures and not directly by the Fed’s short-term interest rate policy changes. Should the inflation rate subside, mortgage rates can also dip.

With housing inflationary pressure easing, especially in the oversupplied apartment sector, future inflation figures appear manageable. Moreover, AI-induced gains in worker productivity will also lessen future inflationary pressures. Therefore, the Federal Reserve policy should anticipate lighter inflation in the future, especially if oil prices soon retreat.