Portland Mortgage Market Update — July 31, 2026

It was Fed Week this week and rates were left untouched. There were some fireworks behind closed doors, as 3 member dissented as they wanted increase rates. One of the dissenters, Beth Hammack released a statement explaining her dissent today, saying inflation is stubborn because of high energy prices (supply) and the fact that consumers are still willing to spend (demand). She also acknowledged that people are struggling financially, which…doesn't really make sense if they are still willing to spend. Whatever. In his post meeting press conference, Fed Chair Warsh repeatedly stated that:

• The Fed's primary focus is bringing inflation down and establishing price stability • The Fed's primary tool for doing so is to raise interest rates • The Fed did not raise interest rates at this time

Which left many reporters in the room scratching their heads. If the Fed feels they need to bring inflation down, and they have the tool to do so, why not use it?

Maybe inflation isn't so bad right now? Warsh has also been quick to criticize the data that the Fed has used in the past, thinking reports like the BLS jobs report and PCE report are outdated or lag in their accuracy. He prefers the "Dallas Fed Trimmed Mean" inflation report, which is based on the PCE data but strips out the top 31% and bottom 24% inflation measures to focus more on the middle (or mean) data points, thinking if these are moving that would give a better indication of where inflation in sheading. This report showed inflation at 2.4% in May and the most recent report for June shows inflation at 2.2%, so just a hair away from the Fed's 2% target. One might think the Fed is expecting things to settle down in Iran which would stabilize oil prices and bring inflation lower without having to move their rate.

Rates tried to stage a rally this week despite all this but are currently faltering on news of increased oil prices and a currency move out of Japan. Their Central Bank sold a bunch of securities to boost the value of the Yen overnight, and the US 10yr Treasury (which had already been ticking upwards this week) increased their yield to appear more palatable as well. Since 30 yr fixed rates are tied to the 10 yr, and today it broke higher than it has been since the beginning of 2025, rates are worsening a bit.