Will ‘regime change’ at the Fed involve less data-sharing? 

This week's Federal Reserve meeting — the first since Jerome Powell's term as chair came to an end — may garner more attention than usual. While the Fed isn't likely to take any surprising actions on rates, analysts and economists will be looking for signals about how the central bank will operate under its new leader.

Continued pause likely: With the job market remaining resilient and inflation levels on the rise, it's widely expected that the Fed will keep short-term interest rates in the 3.5% to 3.75% range. Cutting rates could push inflation higher, while raising rates — a possibility in the second half of the year, analysts say — is considered off the table for now as the Iran war moves toward a possible peace agreement and energy prices remain volatile.

Instead, the focus of Wednesday's meeting will likely be on what Kevin Warsh, the Fed's newly confirmed chair, does in his quest for "regime change" at the Federal Reserve — particularly how, and how often, it communicates with investors and the media. 

Fewer forecasts from the central bank? During Warsh's confirmation hearing, the nominee argued that publishing economic forecasts can cause policymakers to react to them for longer than they should, and he expressed skepticism about providing forward guidance and holding frequent press conferences, noted Realtor.com Senior Economist Jake Krimmel.

"Whether he stands behind projections issued, or begins to talk them down during his inaugural press conference as Chair will be something to watch," Krimmel said.

Little support for rate cuts: Warsh has been a proponent of cutting short-term rates, but he won't get much support from the current Federal Open Market Committee, especially since Stephen Miran — one of the strongest proponents of rate cuts — resigned from his position on the committee last month to make way for Warsh.

Economic data also runs counter to any argument for rate cuts. With prices increasing and employment relatively strong, "there's really no way they can lower rates," said Melissa Cohn, regional vice president at William Raveis Mortgage.

But raising short-term rates — a tactic sometimes used to tamp down inflation — isn't the answer either, according to Zillow Economist Orphe Divounguy, if inflation is rising due to high gas prices.

"Rate hikes fight demand. Hiking into an oil shock just punishes an economy that isn't overheating," Divounguy said in a LinkedIn post. As a result, he wrote, the odds are "near-certain" that the Fed will do nothing on rates.

What this means for mortgage rates: While not directly tied to mortgage rates, short-term interest rates can influence their direction — but that's less likely in the current economic environment. Global headlines and investor views on inflation are more important factors at the moment, Krimmel suggested.

"There is a real catch-22: if markets think the Fed is cutting for political reasons rather than data-driven ones, that gets priced into long-term yields as the potential for higher inflation, and mortgage rates could actually rise even as the Fed cuts," Krimmel said.

Since the Fed has little control over mortgage rates, the best it can do is focus on the bigger picture.

"What the housing market needs from the Fed is what it has always needed: low, stable inflation and a labor market strong enough to support real wage growth," Krimmel said.

Hope for easing rates: There was some global good news Monday that may push mortgage rates lower in the short-term. Oil prices fell to the lowest levels since March after an apparent peace deal was reached between the U.S. and Iran that includes reopening the Strait of Hormuz.

The news sent 10-year treasuries down, which should also impact mortgage rates. Mortgage News Daily had the 30-year rate pegged at 6.56% early on June 15, down from 6.64% a week ago.