Fed’s Paulson keeps an open mind on rates as core inflation stays elevated
In the second scenario, current policy is not restrictive enough. Inflation has run above target for more than five years, and even stripping out tariff and energy effects, Paulson estimates underlying inflation at between 2.4% and 2.8%.
The Fed’s preferred gauge — the Personal Consumption Expenditures (PCE) index — registered 3.3% on a core basis in June 2026, per the Commerce Department, down from 3.4% in May but still well above target.
“Persistently elevated inflation suggests more restrictive policy may be needed,” she said.
The Fed’s July hold may be just the calm before the storm.
Veteran broker Melissa Cohn says the market’s sharp selloff signals investors were bracing for a hike — and that September is shaping up as the moment for the Fed to act.https://t.co/RczSsOrCqD
— Mortgage Professional America Magazine (@MPAMagazineUS) July 31, 2026
What the 9-3 split signals for brokers
The July 30 vote was 9-3 in favor of holding. Beth Hammack of the Cleveland Fed, Neel Kashkari of the Minneapolis Fed, and Lorie Logan of the Dallas Fed dissented in favor of an immediate quarter-point increase, the first three-way dissent since 2016.
Mike Fratantoni, SVP and chief economist at the Mortgage Bankers Association (MBA), told Mortgage Professional America the split carried an unmistakable message.
