Federal Reserve statement explained – April 2026

At its April 2026 meeting, the Federal Open Market Committee (FOMC) of the Federal Reserve held the target range for the federal funds rate steady at 3.5% – 3.75%. The decision is the third consecutive time the committee has left the rate unchanged following three consecutive rate cuts in late 2025, each by a quarter point.

The April 2026 Fed meeting is also likely to be the last for current Federal Reserve Chairman Jerome Powell, who is expected to step down once his term ends on May 15. Kevin Warsh has been nominated to replace Powell.

As of the April 28 announcement, the average mortgage rate is 6.625% for a 30-year fixed-rate mortgage and 5.875% for a 15-year fixed-rate mortgage. Economists had expected the Fed to hold rates steady amid disappointing employment numbers and lingering inflation. Those numbers are in line with today's Rocket Mortgage rates.

How the federal funds rate affects the economy

Setting the federal funds rate allows the Fed to influence the economy and balance the push-and-pull between employment and inflation. Cutting rates can combat a weak labor market by reducing borrowing costs to stimulate the economy. The Fed typically reduces rates to boost consumer spending and demand for goods, thereby stimulating employment.

However, if the Fed makes it too easy to borrow, it can send prices soaring and fuel inflation. The Fed typically increases the federal funds rate to reduce inflation and tame an overheated economy.

Current economic conditions

According to the Bureau of Labor Statistics, the unemployment rate changed little in March 2026, remaining at 4.3%. While the U.S. economy added more jobs than expected, wages rose less than anticipated, indicating overall cooling in the labor market.

Inflation hit its highest level in nearly 2 years, driven in part by rising energy prices due to the Iran war. The Consumer Price Index rose to 3.3% in March, the highest level since May 2024 and still above the Fed's annual target rate of 2%.

This complicates the Fed’s job of balancing prices and the jobs market. Holding the federal funds rate steady can help keep inflation in check, but it could also hold back the jobs market. A rate cut could reduce the cost of borrowing but further fuel inflation.

What this means for home buyers

When interest rates spiked in 2022 and 2023, many would-be home buyers were priced out of the market. If you've been tracking interest rates because you're looking to buy a home soon, it's important to know that the relationship between mortgage rates and the federal funds rate is not as direct as one might expect.

While changes in the federal funds rate have a more immediate impact on short-term loans and bonds, 30- and 15-year mortgage rates are more affected by Treasury yields and the broader economy. When the 10-year Treasury note changes, mortgage rates tend to follow suit.

That said, the federal funds rate does affect the 10-year Treasury note rate, which is why mortgage rates usually trend with short-term loan rates. A hold on the federal funds rate suggests mortgage rates aren't expected to drop dramatically any time soon.

Options for aspiring home buyers

This can be frustrating news for buyers who have been priced out of the market and can't afford a monthly payment at current rates. If you can afford a monthly mortgage payment but have been trying to time the market to get the lowest rate possible, you may be better off focusing on affordability instead of the rate. It may not be worth it to focus solely on the rate and give up the opportunity to buy sooner and build equity.

While you can't predict the future, you can keep an eye on mortgage rates and determine the right time for you to make a move. Sign up for rate alerts.