Mortgage Rates Today, August 22, 2025: Fed Chief's Big Speech Today

The bigger picture

Federal Reserve Chair Jerome Powell is due to speak at the Economic Policy Symposium in Jackson Hole, Wyoming, at 10 a.m. EDT this morning. And financial media are crammed with speculation about what he might say and its implications for markets (and mortgage rates).

"Powell’s remarks Friday at the annual economic symposium in Jackson Hole, Wyo., will be closely watched by investors and Washington policymakers," said The Wall Street Journal on Wednesday. "Everyone with skin in the game, which is just about everyone who carries a wallet, has reason to listen for clues about when rates might fall.

"To Powell, the Fed’s survival as a central bank that operates outside of partisan control, which he considers a pillar of national prosperity, will depend on how it navigates the current economic moment," the Journal continued. "Those who have worked closely with him say he is focused almost exclusively on making the right decisions, relying on lessons gained from steering the Fed in the pandemic and then being slow to tackle the worst inflation spike in decades."

Yesterday, MarketWatch ran a story under the headline, "Will Powell use Jackson Hole speech to push back on hopes for September rate cut?" Another article from the same source warned, "The Fed chair’s annual speech could trigger a significant repricing in bond yields and risk assets in the U.S. financial market." Mortgage rates are largely determined by the yield on a type of bond known as a mortgage-backed security (MBS).

Also yesterday, Barron's quoted the CIO at Siebert: "'The Fed is not here to throw dog treats to Washington or Wall Street,' Mark Malek, chief investment officer at Siebert Financial, said in a research note. He warned that Powell is more likely to strike a hawkish tone than to hand out relief."

The more hawkish Powell is (meaning the less he talks up the chances of an imminent Fed cut to general interest rates), the higher mortgage rates are likely to climb. MBS investors have mostly already priced in such a cut, so pessimism from Powell could well drive mortgage rates higher today.

However, not everyone is pessimistic. On Wednesday, CNBC quoted an RBC executive: "'We expect this year’s Jackson Hole meeting to offer an opportunity for Powell to again nod towards monetary easing,' said Andrzej Skiba, head of the BlueBay U.S. Fixed Income team at RBC Global Asset Management. 'While there are some hot spots in this month’s inflation reading, it’s probably not enough to deter the doves on the committee.'"

"A Conference Board survey indicates that one in five U.S. employers plans to slow hiring in the second half of 2025," reports The Wall Street Journal yesterday. "Economic uncertainty, tariffs, workplace raids and AI adoption are making business leaders cautious about hiring." Such a slowdown could be a pebble on the Fed's scales in favor of a rate cut.

Nervous investors

Of course, nobody but Powell himself knows what he'll say this morning. But investors are certainly nervous.

On Tuesday, the CME FedWatch tool put the chances of a quarter-point [25-basis-point] cut to general interest rates when the Fed's rate-setting committee next meets (September 17) at 86.1%. On Wednesday night, that chance had fallen to 81.0%. By last night, it was down to 75.0%. Those figures are based on investors' purchases of 30-Day Fed Funds futures.

Yesterday evening, Yardeni Research's Ed Yardeni told MarketWatch, "The odds that the Federal Reserve will cut interest rates by 25 basis points next month should really be less than 50%."

Today's speech is not the final word

It's highly unlikely that Powell will this morning definitively rule out or in a September rate cut. At worst, he could warn markets that such a cut is less probable than they currently think.

That's because the Fed has long said that its rate decisions are data-led. And we have three key inflation reports and a jobs report due before the next meeting.

Higher-than-desirable inflation data are the biggest threat to a rate cut. "Forecasters will be looking to future data on inflation, employment and overall economic growth to see where mortgage rates are headed," wrote Erika Giovanetti, a U.S. News Consumer Lending Analyst, in an e-newsletter yesterday. "If the job market continues to cool, rates could drift lower. But if inflation rears its ugly head, rates will likely stay elevated or even increase."

Coming up

Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning tariffs and deficit funding are especially influential at the moment.

Here's the Comerica Bank's economics team's take on what to expect for the rest of this week:

"On Friday, Chair Powell could explain how he plans to shape the meeting’s decision-making in his speech in Jackson Hole."

Mortgage rates today

Today's MarketWatch economic calendar contains zero economic reports, leaving the day clear for Jerome Powell's speech.