Jul 31, 2026 5:43 PM
If there’s one thing to know about this week’s rate movement it’s that it left us almost exactly where we were last Friday. How we got there felt a bit more dramatic at times.
The week began on a hopeful note following Sunday’s news of a pause in the fighting in Iran. Oil prices moved lower in response and rates followed. Those good vibes lasted all the way through the first half of the week. It wasn’t until Wednesday afternoon’s Fed announcement that we saw a meaningful reversal. To make matters worse, it wasn’t really a logical reversal at first glance.
Futures markets suggested a 1 in 3 chance that the Fed would hike rates this week. They did not hike. You might view that as good news for rates. Markets did too… initially.
Problems arose shortly into Fed Chair Warsh’s press conference. Different Fed watchers have slightly different ideas as to what mattered most, but most agree that the key concern involved mentioning alternative measurements of inflation data beyond the traditional Personal Consumption Expenditures (PCE) data set.
Some took this as a suggestion that he may favor data that paints a better inflation picture in order to keep rates lower than they otherwise might be. The counterpoint is that he could simply be referencing a goal to expand the data set that the Fed considers without abandoning a commitment to 2% PCE inflation. This is arguably relevant at times when PCE is trending in a certain direction and more granular data could help suggest that trend continues.
Beyond that, some felt that the market gave the committee the green light to hike rates at this meeting and demonstrate a firm commitment to the inflation target, and by not hiking rates, some bias toward lower rates was revealed. At this point in Warsh’s tenure, it is too early to make such claims, but that’s not to say they didn’t inform the way some traders reacted.
Lastly, on a purely qualitative note, some traders reported feeling that Warsh was talking tough on inflation without doing enough to reassure markets that he knew what conditions would warrant a rate hike. Their conclusion: if Warsh won’t comment on the Fed’s current reaction function (a separate matter from forward guidance) then markets will take matters into their own hands by selling bonds in the longer end of the yield curve (e.g. 10yr and 30yr Treasuries and, to a lesser extent, mortgage rates).
This newsletter offers no judgment on the views shared above. The goal is to relate market chatter that followed the press conference. Objectively, all we know is that the long end of the yield curve did indeed swoon during the press conference despite initially reacting fairly well to the 2pm Fed announcement itself. For whatever else it’s worth, the swoon ended when the press conference ended.
The week’s only other key event was not so much an isolated event as the general trading dynamic that played out on Friday. It involved additional Treasury selling (which pushes rates higher) in response to currency intervention in Japanese Yen. When Japan seeks to bolster the Yen’s value, one strategy can involve selling sovereign debt of other countries. Excess selling pushes rates higher all else equal.
Esoteric currency considerations aside, Friday also saw oil prices move up moderately in addition to firmer inflation data in the form of the Employment Cost Index. Last but not least, it was also a month-end Friday in July–something that can create random, elevated volatility simply due to the way financial markets wrap up their accounting for the end of the month (with the July/Friday part simply connoting lighter trader participation which traditionally adds potential volatility).
All told, mortgage rates moved up to the second highest level in more than a year, but again, only modestly higher versus last Friday.
In the coming week, oil price volatility remains relevant. We’ll also get the latest jobs report on Friday which is always one of the two most closely watched economic reports as far as rates are concerned.
Recently Released Economic Data
Time
Event
Period
Actual
Forecast
Prior
Monday, Jul 27
8:30
Durable goods (%)
0.3%
2.5%
-4.5%
Tuesday, Jul 28
9:00
1.6%
1.3%
1.1%
9:00
2.2%
10:00
CB Consumer Confidence (%)
90.8
92.3
91.2
Wednesday, Jul 29
14:00
Fed Interest Rate Decision
3.75%
14:30
Fed Press Conference
Thursday, Jul 30
8:30
Jul/25
Jobless Claims (k)
Jul/25
197K
200K
187K
8:30
GDP (%)
1.5%
2.1%
8:30
Core PCE (y/y) (%)
3.3%
3.4%
8:30
Core PCE (m/m) (%)
0.1%
0.2%
0.3%
Friday, Jul 31
8:30
Employment costs (%)
0.9%
0.8%
0.9%
9:45
Chicago PMI
57.6
56.7
10:00
Consumer Sentiment (ip)
55.2
54.0
49.5
Monday, Aug 03
10:00
ISM Manufacturing PMI
55.6
53.3
Tuesday, Aug 04
10:00
USA JOLTS Job Openings (ml)
7.359M
7.4M
7.594M
Wednesday, Aug 05
8:15
ADP jobs (k)
10:00
ISM N-Mfg PMI
54.1
54.5
54.0
Thursday, Aug 06
8:30
Aug/01
Jobless Claims (k)
Aug/01
199K
202K
197K
Friday, Aug 07
8:30
Non Farm Payrolls (k)
-23K
8:30
Unemployment rate mm (%)
4.1%
4.2%
Event Importance:
Low
Moderate
Important
Very Important
Around the Web
Friday, July 31, 2026
Kashkari – Statement on My FOMC Dissent
Minneapolis Fed
US Treasury informed banks that it may intervene in Japan’s yen, source says
Reuters
Barkin: Rate decision still a “close call”
Investing Live
Fed’s Logan: ‘Prices have continued to rise too rapidly’
CNBC
US labor costs increase in second quarter as wage growth picks up
Reuters
Thursday, July 30, 2026
Eye on Housing
U.S. economy slowed to 1.5% growth rate in Q2; June core inflation at 3.3%
CNBC
Wednesday, July 29, 2026
The big focus now is on the potential for a September rate hike after the Fed stands pat
Marketwatch
Fed keeps rates unchanged at 3.75%.
Investing Live
Friday, July 31, 2026
Mortgage News Daily
Mortgage Applications Fall 6.4% as Rates Continue Upward March
Mortgage News Daily
Tuesday, July 28, 2026
Median Lot Value Stabilizes as Regional Trends Diverge
Eye on Housing
Consumer confidence stands at 90.8 in July, missing expectations
CNBC
JCHS
Monday, July 27, 2026
Eye on Housing
Rates matter — but execution matters more.
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Average Mortgage Rates
Mortgage News Daily
Freddie Mac
Rate
Change
Points
30YR Fixed
6.87%
+0.06
15YR Fixed
6.38%
+0.03
30YR FHA
6.40%
+0.03
30YR Jumbo
6.92%
+0.02
7/6 SOFR
6.42%
+0.09
30YR VA
6.42%
+0.05
Rate
Change
Points
30YR Fixed
6.78%
-0.10
0.66
15YR Fixed
6.10%
-0.01
0.90
30YR FHA
6.46%
-0.13
0.82
30YR Jumbo
6.73%
-0.15
0.50
7/6 SOFR
5.98%
-0.18
0.88
Rate
Change
Points
30YR Fixed
6.66%
+0.45
0.00
15YR Fixed
5.98%
+0.51
0.00
MBS and Treasury
Price / Yield
Change
UMBS 5.5
98.91
–0.10
UMBS 6.0
101.06
–0.07
10 YR Treasury
4.777
+-0.19
30 YR Treasury
5.201
-0.05
Pricing as of:
8/31 10:55PM
Recent Housing Data
Value
Change
Mortgage Apps
245.3
-0.97%
4.06M
-0.73%
Builder Confidence
2.94%
Building Permits
1.44M
5.56%
Housing Starts
1.24M
-13.17%
259 W Channel Rd
Source: US Housing Market Weekly — Jay Bridges, Mortgage Lender, Priority Capital Corporation