Fed Meeting Recap: GDP, PCE Data and Mortgage Rates
The Fed meeting ended on Wednesday with rates unchanged, and this morning we got the first major data since then. Growth was stronger than expected and inflation stayed far above target, which keeps a December hike in play. Here is what it all means for mortgage rates and for anyone buying, refinancing, or investing in property.
What Happened at the Fed Meeting
The Federal Open Market Committee voted 10–2 to hold its target range at 3.75%–4.00%. It was the first pause after September’s quarter-point hike, and Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of another increase.
The statement was upbeat on the economy. The Fed called activity “strong,” an upgrade from “solid” in September. Chair Kevin Warsh again declined to hint at the next move. He said he doesn’t believe in forward guidance and called the coming weeks “data-rich.” He also announced that the Fed will move to six rate-setting meetings a year, plus two strategy meetings, beginning in late 2027.
GDP and PCE: The First Data After the Fed Meeting
This morning’s reports gave the Fed meeting its first test.
- Growth: The economy grew at a 3.4% annual rate in the third quarter, up from 2.2% in the second quarter and above the 3.1% economists expected. qz
- Inflation: September’s PCE price index rose 3.6% from a year earlier, 0.1 point below forecasts, and rose 0.5% on the month, as expected. Core PCE, which excludes food and energy, rose 3.1% from a year earlier and 0.3% on the month, matching expectations.
The message is mixed. Inflation didn’t come in hotter than forecast, but it is still well above the Fed’s 2% goal, and growth is strong enough to give policymakers room to keep tightening. Traders were pricing roughly an 85% chance of a December hike after the Fed meeting.
How the Fed Meeting Affects Mortgage Rates Today
The Fed doesn’t set mortgage rates directly. They follow longer-term Treasury yields. The 10-year yield closed Wednesday at 5.044% after the decision and eased to about 5.00% on Thursday. That is why a hold didn’t deliver relief.
Here is where mortgage rates stand:
- Freddie Mac’s latest published survey, from October 22, put the 30-year fixed at 7.32%, down from 7.40%. A year ago it averaged 6.19%. Freddie Mac’s next reading is due today.
- The MBA’s contract rate for the week ending Oct. 23 was 7.37%, the lowest in three weeks.
- Mortgage Research Center’s daily average for a 30-year conforming loan is 7.21% today, down from 7.31% a week ago.
Rates are easing slightly, but they are still more than a point above last year.
Housing Demand Is Still Weak
NAR’s pending home sales index fell 7.3% in September to 66.0, the lowest reading in the index’s history, and was down 11.3% from a year earlier. MBA data shows purchase applications were 18% below last year’s pace and refinance applications 61% lower. The share of adjustable-rate applications rose to 11.3%, the highest in more than a year.
There is one cautiously hopeful note. NAR chief economist Lawrence Yun said mortgage rates have already risen far more than the Fed’s hikes, so they could be topping out. That is an opinion, not a forecast you can count on.
What the Fed Meeting Means for Buyers and Investors
Waiting for a big drop may be a long wait, so it helps to prepare now:
- Compare more than the rate. Fees, points, and APR all matter. Our guide to working with a direct mortgage lender and our home loan guide explain what to compare.
- Review refinance options carefully. With refinancing demand so low, run the numbers on a rate and term refinance or a cash-out refinance before committing.
- Investors can qualify on rental income. A DSCR loan looks at the property’s cash flow, and a DSCR purchase loan can help you buy in a slow market.
- Use short-term financing for value-add deals. Bridge loans and fix and flip loans help you move quickly when sellers are more flexible.
You can also test different loan amounts with the payment calculator on our homepage.
What to Watch Before the Next Fed Meeting
The market will be looking at Treasury yields and each new inflation and jobs report. Futures were pricing a December 9 hike at about 85% after the press conference. A softer run of data could ease that, while stronger numbers would add upward pressure on yields and mortgage rates.
Bottom Line
The Fed meeting held rates steady, but today’s data shows strong growth and stubborn inflation, so more tightening is still possible. Get pre-approved, compare lenders, and look at loan types that fit your goals. Ready to talk? Apply now, contact our team, or explore our loan programs.
Disclaimer: Rates and market data change daily and are for informational purposes only. This article is not financial advice. Contact Kala Lending for current program terms.