Mortgage Rates Today, Tuesday, June 16: Lower Still

Mortgage rates continued their decline this week as a U.S.-Iran agreement to reopen the Strait of Hormuz eased global economic pressures, while the Federal Reserve began a two-day policy meeting under its newly appointed chair.

The average interest rate on a 30-year, fixed-rate mortgage fell to 6.15% APR on Wednesday, according to NerdWallet ^[2]. That is down from 6.27% APR reported a day earlier ^[1]. The drop extends a slide that has brought rates to their lowest level in more than a month ^[1].

The decline follows news that the U.S. and Iran have agreed to reopen the Strait of Hormuz, a critical shipping chokepoint whose prolonged closure has damaged the global economy ^[2]. Iran indicated that talks to resolve the broader conflict would begin after an in-person signing on Friday ^[1].

The rate moves coincide with the Federal Open Market Committee's two-day meeting, which began Tuesday. It is the first meeting for newly appointed chair Kevin Warsh ^[1]. Markets are predicting overwhelming odds that the FOMC will vote to hold overnight borrowing rates steady, though the meeting will also produce a new Summary of Economic Projections ^[1]. The Federal Reserve is expected to announce no change to the federal funds rate this afternoon, but markets anticipate a possible rate increase later this year ^[2].

Even though the Fed does not set mortgage rates, its decisions influence their direction. Lenders often price in expected central bank moves ahead of official announcements ^[1]. May economic data has shown intensifying inflation and an improving job market, which could pressure the Fed to raise rates rather than cut them ^[1]. An end to the war in Iran could slow inflation, but it would not be an immediate stop ^[1].