Mortgage servicers benefit most from FOMC’s inaction: KBW

In the aftermath of the Federal Open Market Committee’s June meeting, certain interest rate spreads should narrow, but the overall impact for mortgages is mixed, a Keefe, Bruyette & Woods report said.

Part of that depends on which segment of the industry the company operates in. Mortgage rates remaining elevated, with the 30-year fixed only falling to 6.5% by year-end, is good news for servicers, KBW analysts Catherine Mealor, Matt Kelley, Bose George and Christopher McGratty wrote.

“Our revised baseline still calls for two 25 basis point cuts before year-end and two in 2026, aligned with the Fed’s dot plot,” the analysts said. “The Fed held rates constant (as expected), and Chairman Powell stated that the effects on the economy from changes in trade, immigration, fiscal and regulatory…