A possible Federal Reserve rate hike does not automatically mean mortgage rates will rise, but Fed Chairman Kevin Warsh’s latest comments give homebuyers and sellers another reason to watch inflation and the bond market closely. For buyers and sellers in California’s Inland Empire and High Desert, the more important question is not simply what the Federal Reserve does in September, but how financial markets respond to inflation, economic growth, and expectations about future Fed policy. Chairman Warsh’s August 28 remarks made one thing clear: the Federal Reserve is not yet satisfied that inflation is moving toward its 2% target quickly enough.
That does not mean a September rate hike is certain.
In fact, Warsh deliberately avoided committing to a specific decision. His message was that inflation remains too high, the economy appears relatively strong, and the Fed intends to respond to the evidence rather than promise a particular path for interest rates.
For anyone considering buying or selling a home in the Inland Empire or High Desert, understanding that distinction matters.
Key Takeaways
- Fed Chairman Kevin Warsh did not announce a September rate hike, but his August 28 comments made clear that additional tightening remains possible if inflation does not improve sufficiently.
- The Federal Reserve’s next scheduled monetary policy meeting is September 15-16, 2026.
- The Fed directly influences short-term interest rates. It does not directly set 30-year fixed mortgage rates.
- Mortgage rates tend to move closely with the 10-year U.S. Treasury yield, although mortgage-backed securities pricing and the mortgage-to-Treasury spread also affect consumer mortgage rates.
- A Fed rate hike does not necessarily produce an equivalent increase in mortgage rates. Bond markets frequently move before the Federal Reserve takes action.
- Inland Empire and High Desert buyers and sellers should focus on affordability, monthly payments, property value, and their individual timeline rather than trying to predict one Federal Reserve meeting.
What Did Fed Chairman Kevin Warsh Actually Say?
There is an important difference between what Warsh said and some of the headlines his Jackson Hole speech generated.
Warsh did not announce that the Federal Reserve will raise rates in September.
Instead, he emphasized that inflation remains above the Federal Reserve’s target and said policymakers need convincing evidence that underlying inflation is moving in the right direction.
According to the Federal Reserve’s published transcript of his August 28 Jackson Hole remarks, Warsh said the Fed’s preferred inflation measure, the Personal Consumption Expenditures price index, was running at 3.7% over the preceding 12 months. He also noted that the six-month change was 4.1%.
His conclusion was straightforward: inflation is still running above the Federal Reserve’s 2% target.
Warsh also said that although some inflation readings during the summer were better than expected, he did not believe those readings demonstrated that the underlying inflation trend had “meaningfully improved.”
That is the part of the speech consumers should pay attention to.
At the same time, Warsh described the economy as having strengthened and characterized labor markets as stable. He reported unemployment at 4.1% and said the labor market appeared consistent with full employment.
In other words, the Federal Reserve is looking at an economy that Warsh believes is holding up relatively well while inflation remains too high.
That combination gives policymakers room to remain focused on controlling inflation.
Source: Federal Reserve Board, Chairman Kevin Warsh, “In Our Time,” Jackson Hole Economic Policy Symposium, August 28, 2026.
Does This Mean the Fed Will Raise Rates in September?
No one should treat Warsh’s speech as an announcement of a September rate hike.
The Federal Open Market Committee is scheduled to meet September 15-16, 2026. The committee will have additional economic information to evaluate before making its decision.
At its July meeting, the FOMC left the federal funds target range unchanged. However, the minutes show that three voting members preferred a quarter-percentage-point increase at that meeting.
That tells us there was already disagreement within the committee about whether monetary policy needed to become more restrictive.
Warsh’s Jackson Hole comments add another piece to that discussion, but they do not predetermine the September decision.
His closing statement may be the best way to understand the Fed’s current posture:
“I stand here today committed to a discipline, not to a decision.”
— Kevin Warsh, Chairman, Federal Reserve Board, August 28, 2026
For consumers, that means the September meeting remains an important event, but predicting the decision is less useful than understanding what could cause financial markets to move before and after it.
The Most Important Distinction: The Fed Does Not Set Mortgage Rates
This is where real estate discussions about the Federal Reserve often become confusing.
The Federal Reserve does not sit down at its September meeting and decide what the interest rate will be on a 30-year conventional home loan.
The Fed’s primary interest-rate tool affects short-term rates.
Thirty-year fixed mortgage rates operate differently.
Mortgage rates are influenced much more closely by the bond market, particularly the 10-year U.S. Treasury yield and pricing for mortgage-backed securities.
Freddie Mac has described Treasury yields as an anchor for mortgage-backed securities pricing and has documented a close historical relationship between the 10-year Treasury yield and the 30-year fixed mortgage rate.
However, Freddie Mac also cautions that the two do not move in lockstep.
That is because the difference, or “spread,” between Treasury yields and mortgage rates can change. Investor perceptions of mortgage risk, mortgage-backed securities supply and demand, prepayment expectations, market volatility, and other financial conditions can all influence that spread.
Think About It This Way
The Federal Reserve: Directly influences short-term interest rates through monetary policy.
The 10-Year Treasury: Reflects financial-market expectations involving inflation, growth, monetary policy, risk, and investor demand.
Mortgage-Backed Securities: Help determine how mortgage loans are priced in capital markets.
Mortgage Rates: Reflect Treasury yields plus mortgage-market conditions, risk and the mortgage-to-Treasury spread.
That is why saying “the Fed raised rates, so mortgage rates must rise by the same amount” is incorrect.
Could Mortgage Rates Rise Before the September Fed Meeting?
Yes.
Mortgage rates do not have to wait for the Federal Reserve to make a decision.
Financial markets are forward-looking.
Bond investors constantly evaluate new inflation reports, employment numbers, economic growth, Federal Reserve speeches, geopolitical developments, and other information that could affect future inflation and interest rates.
If investors become more concerned about inflation, Treasury yields can rise.
If Treasury yields rise and mortgage spreads remain similar, mortgage rates may also face upward pressure.
The reverse is possible too.
If economic information changes expectations, Treasury yields can fall even before the Fed acts. Mortgage rates can potentially respond as well.
This is why watching only the date of a Federal Reserve meeting can give homebuyers and sellers an incomplete picture.
“For homebuyers and sellers, the important question is not simply whether the Fed raises a short-term rate. It is how the bond market interprets inflation, economic growth and future monetary policy, because those expectations can affect mortgage financing before the Fed ever announces a decision.”
— Charlotte Volsch, Broker Owner and Estate Property Advisor, Inland Empire and High Desert
Why Inflation Matters So Much to Mortgage Rates
Inflation matters because investors purchasing long-term bonds care about the purchasing power of the money they will receive in the future.
When inflation expectations increase, investors may demand higher yields for holding longer-term debt.
Those movements can flow through the mortgage market.
That helps explain why Warsh’s inflation comments received so much attention.
He did not merely say inflation was slightly above target.
According to his speech, the Fed’s preferred PCE inflation measure was 3.7% over the prior 12 months compared with the Federal Reserve’s 2% objective.
He also examined the individual components of the PCE index. Warsh reported that 54% of goods and services in the PCE basket had experienced price increases above 3% over the previous 12 months.
His concern, therefore, was not based on a single monthly inflation report.
He was focused on whether the broader underlying trend was improving sufficiently.
For mortgage markets, that distinction matters.
What Does This Mean for Inland Empire and High Desert Homebuyers?
For buyers in Apple Valley, Victorville, Hesperia, Rancho Cucamonga, Redlands, Loma Linda, Fontana and surrounding Inland Empire and High Desert communities, the practical takeaway is not “buy before rates go up.”
It is to understand your numbers before making a decision.
Trying to perfectly time mortgage rates is difficult because rates can react to financial-market expectations before the event everyone is waiting for occurs.
Instead, a buyer can evaluate several concrete questions:
- What monthly payment works comfortably for your household?
Purchase price alone does not determine affordability. Interest rate, down payment, property taxes, insurance, HOA costs when applicable, and other expenses all contribute to the monthly obligation. - How sensitive is your buying power to a change in mortgage rates?
Ask your lender to calculate payments under several realistic interest-rate scenarios. That provides useful information without requiring you to predict where rates will go. - What happens if rates improve after you purchase?
Depending on future market conditions and individual circumstances, refinancing may eventually become an option. It should not, however, be assumed or required to make today’s purchase affordable. - Are you choosing the right property at a sustainable payment?
A favorable interest rate cannot make the wrong property or an uncomfortable payment a good financial decision.
The objective is not to win a guessing game against the Federal Reserve.
It is to make a housing decision that works under the conditions available to you.
What Does This Mean for Inland Empire and High Desert Home Sellers?
Sellers should pay attention to interest rates for a different reason.
Mortgage rates affect buyer purchasing power.
When financing costs increase, some buyers may qualify for less, adjust their target price range, increase their down payment, or postpone a purchase.
That does not mean every market or every price range responds identically.
Real estate remains local.
Property condition, inventory, competition, location, pricing, buyer demand and financing all interact.
For sellers in the Inland Empire and High Desert, this makes accurate pricing and current local-market analysis particularly important.
A seller should not base a listing decision solely on a prediction about September’s Fed meeting.
Instead, the better questions are:
- How much competing inventory exists in this property’s price range?
- How long are comparable properties taking to sell?
- What have comparable homes actually sold for?
- How sensitive is the likely buyer pool to financing costs?
- Is the property positioned appropriately for current conditions?
Those questions can be answered with current market evidence.
The Federal Reserve’s next decision cannot.
What Should Buyers and Sellers Watch Before September 15?
Consumers do not need to become bond traders to understand the direction of the market.
A few indicators are particularly useful.
Inflation Data
Warsh made inflation the central issue in his Jackson Hole remarks.
If subsequent inflation data indicate that price pressures remain persistent, financial markets may increase expectations for tighter monetary policy.
If inflation shows convincing improvement, expectations can change.
The 10-Year Treasury Yield
For someone following mortgage-rate trends, the 10-year Treasury is generally more informative than simply watching the federal funds rate.
It is not a one-for-one mortgage-rate predictor, but it provides useful context for the direction of longer-term borrowing costs.
Mortgage-Backed Securities
The mortgage market has its own pricing dynamics.
Changes in demand, risk and spreads can cause mortgage rates to behave differently from Treasury yields on any particular day or week.
Federal Reserve Communication
Warsh also used his Jackson Hole speech to advocate for what he called a “quieter Fed.”
He argued that financial markets should not depend on every statement from a Federal Reserve official to determine their next trade.
That philosophy could mean consumers and markets receive fewer explicit clues about future decisions than they became accustomed to under previous Fed leadership.
The data may therefore matter even more.
A “Quieter Fed” Could Make Rate Predictions Even Less Useful
One of the most interesting parts of Warsh’s speech had little to do with September.
It concerned how he believes the Federal Reserve should communicate.
Warsh criticized excessive reliance on “forward guidance,” the practice of giving markets signals about the likely direction of monetary policy.
He argued instead for a central bank that communicates less frequently and more purposefully.
For homebuyers and sellers, there is a useful lesson in that philosophy.
Do not build an important real estate decision around a prediction of what one Fed official will say next.
Economic conditions change.
Markets change.
Inflation changes.
Bond yields can move rapidly as investors process new information.
A real estate decision should therefore be based primarily on your financial circumstances, your property, your local market and your timeline.
What I Would Tell a Southern California Buyer or Seller Right Now
The possibility of another Fed rate hike deserves attention, but it does not deserve panic.
Warsh’s August 28 speech was clearly concerned about inflation. The Federal Reserve’s July meeting also showed that some policymakers were already prepared to raise the federal funds rate.
Those are meaningful signals.
They are not guarantees.
For a buyer, the sensible response is to understand your payment at today’s available mortgage rate and determine whether the property and payment make sense without depending on a future refinance.
For a seller, the sensible response is to understand current competition, recent comparable sales, buyer financing conditions and how your property fits within the local market.
For both groups, the objective should be the same: make decisions from verified information rather than headlines.
“Interest-rate headlines can change in a day. A sound real estate decision starts with the facts you can actually evaluate, your budget, your timeline, the property’s value and current conditions in the local market.”
— Charlotte Volsch, Broker Owner, The Volsch Team at Volsch Enterprises, Inc.
Frequently Asked Questions
Is the Federal Reserve expected to raise interest rates in September 2026?
A September rate increase is possible, but it is not predetermined. Chairman Kevin Warsh’s August 28 remarks expressed concern that inflation remains too high, but he explicitly avoided committing to a particular decision. The Federal Open Market Committee is scheduled to meet September 15-16, 2026, and policymakers will consider incoming economic information before deciding whether to change the federal funds target range.
Will mortgage rates automatically go up if the Fed raises rates?
No. A Federal Reserve rate increase does not automatically cause 30-year mortgage rates to rise by the same amount. The Fed directly influences short-term rates, while fixed mortgage rates are much more closely connected with longer-term bond-market conditions, particularly the 10-year Treasury yield and mortgage-backed securities pricing. Mortgage rates can rise, fall or remain relatively stable around a Fed decision depending on what financial markets had already anticipated.
Why do mortgage rates follow the 10-year Treasury?
The 10-year Treasury provides an important benchmark for longer-term interest rates, and Treasury yields help anchor mortgage-backed securities pricing. Freddie Mac research has documented a strong historical relationship between the 10-year Treasury yield and the 30-year fixed mortgage rate. However, the relationship is not exact because the mortgage-to-Treasury spread changes with market risk, investor demand, mortgage-backed securities conditions and other factors.
Should I wait until after the September Fed meeting to buy a home?
Not necessarily. Waiting solely because of a predicted Fed decision means making a housing decision based on an outcome nobody can know with certainty. A more useful approach is to determine whether you can comfortably afford an appropriate property under current financing conditions. Buyers in the Inland Empire and High Desert can also ask their lender to model several rate scenarios before deciding.
Should I wait to sell my Inland Empire or High Desert home until mortgage rates fall?
Not necessarily. The decision to sell should consider your objectives, timeline, property condition, competing inventory, recent comparable sales and current buyer demand. Mortgage rates are one factor affecting demand, but they are not the only factor determining whether a property sells or what a buyer will pay. Current local market data provides a stronger basis for the decision than an interest-rate forecast.
In A Nutshell . . .
Kevin Warsh’s Jackson Hole speech did not tell Americans exactly what the Federal Reserve will do in September, and that appears to have been intentional.
What it did tell us is that inflation remains the central concern.
The Fed wants clearer evidence that underlying inflation is moving toward its 2% objective. Until policymakers see sufficient progress, higher short-term rates remain a policy possibility.
For real estate consumers, however, the distinction between Fed policy and mortgage rates is critical.
The Fed controls short-term policy rates. The bond and mortgage-backed securities markets play a much larger role in determining the 30-year fixed mortgage rates consumers actually see.
For buyers and sellers throughout the Inland Empire and High Desert of Southern California, that means the most useful strategy is not predicting September.
It is understanding today’s numbers, monitoring the evidence and making a real estate decision that remains sound even when tomorrow’s headline changes.
About the Author
Charlotte Volsch | Broker Owner | Estate Property Advisor & Probate & Trust Real Estate Specialist
Charlotte Volsch is a Broker Owner, Estate Property Advisor, and Probate & Trust Real Estate Specialist serving the Inland Empire and High Desert of Southern California. She has more than 24 years of residential real estate experience, with a specialized focus on probate and trust real estate for more than 16 years.
Charlotte has completed 774+ residential real estate transactions, including more than 230 probate and trust property sales. Her experience includes 68 closed transactions during the past 12 months.
She holds Probate Real Estate Certification through the National Association of REALTORS® and is a Certified Probate Real Estate Advisor through Probate Biz.
The Volsch Team at Volsch Enterprises, Inc. | Inland Empire & High Desert | 760-912-8905 | www.volschteam.com
California DRE License #01307532
Brokerage: Volsch Enterprises, Inc.
California DRE #01401158