Wolf Forecasts Fed Hold Until December 2026 on Interest Rates Today

Interest rates today sit on a path Michael Wolf says keeps the Federal Reserve unchanged until December 2026, with the average federal funds rate then reaching its neutral 3.125% in the middle of 2027. For would-be homebuyers and refinance borrowers, that leaves mortgage pricing tied to a slower Treasury shift rather than an immediate drop.

Wolf’s 3.125% Fed path

3.125% is the midpoint in Deloitte’s December update, where Wolf said, "We assume the Fed leaves rates unchanged until December 2026. The average federal funds rate reaches its neutral 3.125% in the middle of 2027." He also said the 10-year Treasury yield will ease gradually through the second quarter of 2027 before settling lower later in the decade.

3.9% is the level Wolf said the 10-year Treasury will "settle at... from the third quarter of 2027 through the end of 2030." That matters because 30-year fixed mortgage rates typically move with Treasury yields, even though lenders add extra cost for credit risk, prepayment risk, and mortgage-backed securities demand.

Mortgage spreads at 1.91 points

1.91 percentage points was the spread on March 5, when the 10-year Treasury yield stood at 4.09% and the 30-year fixed mortgage rate was 6.00%. That gap has been on either side of 2.5 percentage points in recent years, but from 2010 to 2020 it was under two percentage points and often near 1.5 percentage points.

2.5 percentage points is the wider recent spread that has left mortgage rates elevated relative to Treasuries, even after Treasury yields ease. The spread can narrow if mortgage-backed securities demand improves, but the latest readings still leave borrowers paying more than the Treasury move alone would imply.

CBO and Goldman Sachs

4.1% is the Congressional Budget Office’s end-of-2026 projection for the 10-year Treasury yield, and 4.3% is its call for 2030. Goldman Sachs analysts are higher over the long term, expecting the 10-year Treasury to rise to 4.5% by 2035.

Those forecasts frame the next few years for anyone timing a home purchase or refinance. If Wolf’s path holds, mortgage rates would still be following a Treasury market that cools first, then settles into a higher plateau than the 2010 to 2020 period.