Kevin Warsh may see no cuts

Kevin Warsh is arriving at the Federal Reserve with mortgage rates moving the other way. Freddie Mac said on May 21 that the average rate on a 30-year fixed mortgage rose to 6.51%, up from 6.36% a week earlier and the highest level in nearly nine months. Fox Business reported that markets increasingly expect the Fed may not cut rates at all in 2026, even as Warsh is set to take over as chair. Nolo reported that Warsh is viewed as more open to cuts than Jerome Powell, but said 3.8% inflation and higher oil prices remain major obstacles to any quick drop in borrowing costs. ### If Kevin Warsh is taking over, why aren’t mortgage rates falling? (freddiemac.com) Freddie Mac’s May 21 survey showed the mortgage market is still responding to broader rate pressures, not just a change in leadership at the central bank. The 30-year fixed rate averaged 6.51%, and the 15-year fixed rate averaged 5.85%, according to the company. NerdWallet and Yahoo Finance, in coverage cited in the source briefing, said mortgage rates are driven more directly by Treasury yields and investor expectations than by the identity of the Fed chair alone. (foxbusiness.com) That means a leadership change does not automatically translate into lower home-loan rates. ### What is standing in the way of rate cuts? (freddiemac.com) Nolo said the main barriers are persistent inflation, high oil prices, tariffs and resistance from other Fed officials. The same report said Warsh may be more willing than Powell to consider cuts, but that the economic backdrop makes a fast move unlikely. The Associated Press, as reflected in syndicated coverage surfaced in search results, linked the latest mortgage-rate increase to higher oil prices after the closure of the Strait of Hormuz, which fed renewed inflation concerns. (finance.yahoo.com) Fox Business said those inflation fears have pushed investors to scale back expectations for easing this year. (nolo.com) ### Can the Fed chair cut rates on his own? The Federal Reserve chair does not set policy alone. Mortgage Professional America reported that Warsh takes over within a committee structure, with the path to lower rates running through the Federal Open Market Committee rather than a unilateral decision. (finance.yahoo.com) NPR reported after Warsh’s confirmation that he has argued there is room for the central bank to lower rates, but said that effort could be difficult in an environment of rising inflation. That leaves his room to maneuver constrained by incoming data and by other policymakers. ### Why does this matter for mortgage borrowers and brokers now? (mpamag.com) Freddie Mac chief economist Sam Khater said borrowers should shop around and get multiple quotes as rates fluctuate. At 6.51%, the average 30-year mortgage remains below the 6.86% level of a year ago, but it is still high enough to keep affordability under pressure. For brokers, the immediate issue is expectation-setting. (npr.org) The recent reporting across Fox Business, Nolo and other housing outlets points to the same near-term message: a new Fed chair may change the tone in Washington, but inflation, oil and bond-market pricing are still the forces shaping mortgage costs. ### What should readers watch next? (freddiemac.com) Warsh is expected to be sworn in on Friday, according to reports surfaced in search results. After that, investors will be watching upcoming inflation prints, oil-price moves and the Federal Open Market Committee’s next meetings for evidence that the outlook on cuts is changing. (msn.com) (foxbusiness.com)