Mortgage Rates Climb Despite a Fed on Hold: The Spread Story

The Fed has held its benchmark at 3.50%–3.75% since January 2026. Yet the 30-year fixed mortgage has risen roughly 20–25 basis points over that span, reaching 6.76% near a one-year high per Reuters. The gap reflects term-premium expansion and a repriced rate-cut path — bond markets, not the Fed, are driving borrowing costs. Three FOMC dissents on July 29 deepen the uncertainty.