Fed Preview: Economist says this week’s Fed decision ‘may be a close call’
“A rate hike remains likely at this week’s meeting, but it is not an open-and-shut case,” he said. “The bond market has already done some of the Fed’s work by pushing long-term yields higher and tightening financial conditions, reducing the need for immediate policy tightening. Even so, August’s firmer core inflation reading raises the concern that this market-based tightening may not be enough to bring inflation under control, keeping a rate hike squarely on the table.”
Finding a silver lining
With rates having moved closer to 7% in recent weeks, Williamson said he does not expect a dramatic shift in either direction through the balance of 2026.
“Mortgage rates are likely to spend the rest of 2026 zig-zagging in the mid-6% to low-7% range,” he said. “The silver lining is that higher rates can delay life, but they cannot stop it. People will marry, have children, change jobs, and relocate. All of those life events can still prompt a move, even among the ‘missing’ first-time buyers who are still living with their parents.”
Beyond the headline rate debate, Williamson said brokers should watch a handful of smaller trends that are easy to miss next to the bigger Middle East-driven energy story.
