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ederal Reserve members are increasingly discussing interest rate cuts, with some advocating for action soon and others weighing the potential impact of tariffs. Federal Reserve Bank of Atlanta President Raphael Bostic believes at least one cut is coming this year, but hasn't specified whether it will occur in July. He expects more adjustments next year, forecasting three cuts in 2026 due to concerns about trade tariff effects on businesses, which he thinks will pass price increases onto consumers.

    Bostic suggests the Fed can afford to wait and see how things unfold, citing solid labor markets. In contrast, Minneapolis Federal Reserve Bank President Neel Kashkari is expecting two rate cuts in 2025, starting in September, as inflation cools despite tariff policy changes. He notes that businesses are adapting supply routes to minimize tariff impacts.

    Two Fed Board of Governors members, Christopher Waller and Michelle Bowman, want to cut rates as soon as July to avoid a job market slowdown. They argue it's better to act now rather than waiting for a downturn. The next Fed meeting is scheduled for July 29-30.

    If the Fed cuts short-term interest rates, there's no guarantee mortgage rates will decrease. Mortgage rates are more closely tied to changes in the 10-year Treasury note, reflecting market perceptions of the economy and inflation. Investors appear to be pricing in a rate cut, with mortgage rates drifting downward recently, potentially leading to increased activity this summer as pending sales and mortgage applications rise.