If you’ve been watching mortgage rates and wondering when the Federal Reserve will cut again, you’re not alone. Since December 2025 the Fed has held its benchmark rate at 3.50%–3.75%, with the next move still uncertain.
Current Federal Funds Rate: 3.50%–3.75% (June 2026) ·
Last Rate Change: Unchanged for 4 consecutive meetings since October 2025 ·
Next FOMC Meeting: July 28–29, 2026 (scheduled) ·
Market Probability of Rate Cut in July: Check CME FedWatch for latest
Quick snapshot
- Fed funds rate: 3.50%–3.75% (Equals Money)
- Fed held rates steady at March and April 2026 meetings (Fidelity)
- Next FOMC meeting: July 28–29, 2026 (Federal Reserve Board)
- Whether the Fed will cut, hold, or hike in July 2026
- Future trajectory of mortgage rates
- Timing of next rate cut
- December 2025: Fed cut 0.25 percentage point to current range (Fidelity)
- March & April 2026: No change after four consecutive holds (Equals Money)
- July 28–29, 2026: Next decision window (Federal Reserve Board)
- FOMC meeting July 28–29, 2026 (Federal Reserve Board)
- Market-implied probabilities shifting — CBS News reported ~99% chance of hold at June meeting
- Mortgage rates likely to react before the decision (The Mortgage Reports)
Five key facts, one pattern: the Fed is in pause mode, and the next move depends on inflation and jobs data.
| Fact | Value |
|---|---|
| Current Fed Funds Rate | 3.50%–3.75% (June 2026) |
| Last Rate Change | Unchanged for 4 consecutive meetings |
| Next FOMC Meeting | July 28–29, 2026 |
| Average 30-Year Fixed Mortgage Rate | 6.5% (as of June 2026) |
| Market Expectation for Next Rate Cut | Uncertain – check CME FedWatch |
What time is the US Fed rate cut?
Fed rate announcements always hit at 2:00 PM Eastern Time on the second day of each FOMC meeting, followed by a press conference 30 minutes later. That schedule is fixed — it doesn’t change with the decision. According to the Federal Reserve Board, the 2026 calendar includes eight set meetings, and each decision is announced at the same time. For the April 2026 meeting, the rate decision came at 18:00 GMT (2:00 PM ET) and the press conference at 18:30 GMT (Equals Money).
What is the next FOMC meeting date?
The next scheduled FOMC meeting is July 28–29, 2026, as confirmed by the Federal Reserve Board.
How to track Fed rate decisions in real time
- CME FedWatch Tool — shows market-implied probabilities for rate changes at each meeting.
- FOMC calendar — official schedule on federalreserve.gov.
- Financial news — Fidelity and CBS News provide pre-meeting analysis.
For borrowers closing soon, locking before a Fed meeting is safer: rates already reflect expected moves and can spike on a hawkish surprise (The Mortgage Reports).
What this means: you never need to wait for a specific clock time to act — the market prices in expectations days before. If you’re floating a rate, the move happens well before 2:00 PM ET.
Did the Feds cut interest rates today?
As of June 2026, the Federal Reserve has not cut rates since December 2025. The target range remains at 3.50%–3.75% after holds at the March, April, and June meetings (Fidelity). The effective federal funds rate was about 3.64% in March 2026, just above the midpoint (Equals Money).
How often does the Fed change rates?
The FOMC meets eight times per year on a pre-published schedule (Federal Reserve Board). Rate changes can happen at any meeting, but the Fed has held steady for four consecutive meetings since October 2025. The next opportunity to act is July 28–29, 2026.
Even with no change, mortgage rates have climbed in spring 2026 — up about 0.5 percentage points from December 2025 levels — because bond markets are pricing in future hikes and geopolitical risk (CBS News).
The pattern: the Fed is waiting, but markets are moving ahead. Don’t assume “no cut” means “no change in mortgage costs.”
What does rate cut mean?
A rate cut is when the Federal Reserve lowers its target for the federal funds rate — the interest banks charge each other for overnight loans. That reduction flows through to consumer borrowing costs, making mortgages, car loans, and credit cards cheaper over time. According to Fidelity, the Fed cut rates by 0.25 percentage point in December 2025 to stimulate the economy as inflation moderated. Rate cuts typically aim to combat recession or low inflation, and they often follow a period of high borrowing costs.
How does a rate cut affect the economy?
- Lower borrowing costs encourage business investment and consumer spending.
- Weaker dollar may boost exports.
- Inflation can temporarily rise if demand picks up too fast.
What’s the difference between a rate cut and a rate hike?
A rate hike raises borrowing costs to slow down an overheating economy and curb inflation — the Fed did that aggressively in 2022–2023. A rate cut does the opposite. The Fed’s dual mandate: maximum employment and 2% inflation. Right now, inflation is around 2.4% (Fidelity), still above target, which explains the pause.
Why this matters: the Fed’s next move — cut, hold, or hike — will reshape monthly payments for millions of borrowers. But it’s not the only force driving mortgage rates.
Will mortgage rates drop to 3% again?
Unlikely in the near term. Average 30-year fixed mortgage rates fell by about one percentage point during 2025, then rose again in spring 2026 to around 6.5% (CBS News). NerdWallet’s June 2026 outlook reports rates climbing since the start of the Iran war, even without Fed hikes (NerdWallet). Most forecasters expect mortgage rates to hover in the low-6% range through mid-2026 (The Mortgage Reports).
Are mortgage rates expected to drop to 5%?
Possibly, but not this year. For rates to fall to 5%, the Fed would need to cut deeply and bond yields would need to drop significantly. The Fed’s March 2026 Summary of Economic Projections implied around one small cut for the year (Equals Money). Some banks have pushed expected timing for the first cut to September or later.
Relationship between the Fed rate and mortgage rates
Mortgage rates don’t directly follow the Fed rate — they are influenced by long-term bond yields (especially the 10-year Treasury) and market expectations. The Mortgage Reports explains that mortgage rates react to expectations about the Fed via the 10-year yield well before an FOMC announcement (The Mortgage Reports). So Fed pauses can still coincide with rising mortgage rates if markets anticipate future hikes.
The catch: even if the Fed cuts once or twice, mortgage rates may not drop much because bond markets already price in those cuts. A return to 3% mortgages would require a dramatic recession or a new round of QE — not the current outlook.
Should I fix for 2 or 5 years now?
This decision depends on your risk tolerance and rate expectations. A 2-year fix gives flexibility — you can refinance sooner if rates drop. A 5-year fix locks in certainty but at a potentially higher rate. Current yield curve suggests a 2-year fix may be better if rates are expected to fall, but the outlook is unusually murky. According to the The Mortgage Reports, locking before a Fed meeting is safer, and they recommend asking lenders about a rate-lock with a float-down option so you can benefit if rates drop unexpectedly.
Pros and cons of fixing for 2 years
Upsides
- Lower rate than longer fixes in a flat yield curve
- Opportunity to refinance if rates fall in 2027
- Less commitment if life circumstances change
Downsides
- Payment could spike at renewal if rates haven’t dropped
- No protection against rate hikes in 2027–2028
- More frequent refinancing costs
What factors should you consider?
- Your time horizon: planning to move in 2 years? A 2-year fix is natural.
- Rate expectations: if markets expect cuts in 2027, a 2-year fix lets you catch them.
- Payment certainty: if you need predictable monthly costs, a 5-year fix wins.
The trade-off: shorter fixes offer flexibility but gamble on future rates; longer fixes provide stability at the cost of potential savings. Given the Fed’s uncertain path — with some analysts at Charles Schwab noting futures markets are pricing in a rate hike by October 2026 — the 2-year fix may be the safer bet for borrowers who can handle moderate payment risk.
Timeline: The rate path so far
- October 2025 — Fed holds rate at 3.50%–3.75% (Federal Reserve Board)
- December 2025 — Fed holds rate (fourth consecutive hold) (Fidelity)
- March 2026 — Fed holds rate after three 2025 cuts ended in December (Equals Money)
- June 2026 — Fed holds rate for fifth consecutive meeting (CBS News)
- July 28–29, 2026 — Next FOMC meeting (rate decision expected) (Federal Reserve Board)
Source: Federal Reserve Board, Fidelity
The pattern: The Fed has held steady for five consecutive meetings, with no rate cut since December 2025. The next meeting could break the pause.
What we know and what’s still unclear
Confirmed facts
- Federal funds rate is 3.50%–3.75% as of June 2026.
- Fed has held rates steady for four consecutive meetings.
- Next FOMC meeting is July 28–29, 2026.
What’s unclear
- Whether the Fed will cut, hold, or hike in July 2026.
- Future trajectory of mortgage rates.
- Timing of next rate cut — possibly September or later.
“Markets are increasingly pricing in a 2026 rate hike due to growing inflationary pressures.”
— J.P. Morgan Global Research (via Charles Schwab)
“Investors assigned nearly a 60% chance of at least one rate hike by year-end 2026 in derivatives markets.”
— Fidelity (Fidelity)
For U.S. mortgage borrowers, the decision is clear: locking in a rate now — especially with a float-down option — protects against a potential hike, while those who can wait may benefit only if the Fed cuts more than once. The safest path: lock now, hope for a better rate later. The risk of waiting is real, and the data suggests the next Fed move could be up, not down.
Frequently asked questions
How does a rate cut affect my savings account?
Banks typically lower savings account yields after a Fed rate cut, reducing your interest earnings. The effect is not immediate but usually follows within a billing cycle.
What is the difference between the Fed rate and the prime rate?
The federal funds rate is the overnight rate between banks; the prime rate is what banks charge their best customers. The prime rate typically moves in lockstep with the Fed rate.
Why does the Fed cut rates during a recession?
To stimulate borrowing and spending. Lower rates reduce the cost of credit, encouraging businesses to invest and consumers to buy, which can help lift the economy.
How often does the Fed meet each year?
The FOMC holds eight scheduled meetings per year, roughly every six to eight weeks (Federal Reserve Board).
Can the Fed cut rates below zero?
Technically yes, but the Fed has never set negative rates in the U.S. and has expressed strong reluctance to do so, preferring other tools like forward guidance and quantitative easing.
What is the inflation target for the Fed?
The Fed targets 2% inflation over the long run, as measured by the Personal Consumption Expenditures (PCE) price index.