Fed Holds Rates Steady, Waits on Data to Inform Potential September Cut

The Fed held rates steady at its July meeting on Wednesday, as expected, despite dissents from two officials. All options are on the table for the September 17 meeting, but it’s clear the labor market needs to weaken for a possible rate cut to materialize. Therefore, mortgage rates will stay flat for now, but may move up or down depending on the results of the next two jobs reports.

There were no surprises from today’s meeting, relative to market expectations. Both the vote outcome and the dissents were expected. This is the first time since 1993 that two governors have dissented on a decision, a sign of the uncertainty of this politically fraught moment. In the grand scheme of things, a 25 bps cut one or two meetings earlier or later is not a big deal, but there is even more…