The latest inflation numbers show things are finally slowing down. If upcoming inflation reports continue trending downward, the Federal Reserve may be on its way to cutting the federal funds rate.

The Fed has kept this rate elevated for all of 2024, and it's a big factor in why mortgage rates — and rates on other financial products — have stayed high as well. But will the Fed consider changing that at its July meeting? And what will it mean for mortgage rates if it does? 

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Will mortgage rates fall after the July Fed meeting? Here's what some experts expect 

Here's what experts think about the possibility of rates falling after the July Fed meeting.

No, rates will not fall

Experts largely agree that the Federal Reserve won't cut rates at its upcoming July meeting. And that means mortgage rates likely won't fall either.

"Our sense is the Fed will not be ready to act and lower rates at the July meeting," says Steve Wyett, chief investment strategist at BOK Financial. "Comments from Fed governors — but especially Chair Powell — lead us to believe the Fed is playing the long game when it comes to inflation."

The latest Consumer Price Index numbers (what most call "inflation") came in at 3.3% last month — slightly below the previous month's readings. Still, they're a far cry from the Fed's 2% goal. 

"While inflation is declining, it is not at a low enough level to convince the Fed that lowering rates is necessary," says Michael Collins, founder of WinCap Financial. "The U.S. continues to have a strong economy despite so many people thinking there will be a recession, which is a reason to keep rates steady."

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Yes, rates will fall (but not in July)

A rate cut is still possible this year, and the Fed even indicated one in its latest projections. However, experts believe it won't come until later in the year.

"We haven't had enough data to show that inflation has cooled for this tightening cycle," says Afifa Saburi, capital markets analyst at Veterans United Home Loans. "Even if inflation continues to show cooling, two months of data will not be enough for the Fed to make the call to cut. The Fed will hold off as long as it can to cut without harming the employment picture." 

The CME Group's Fed Watch tool shows a rate cut is possible in September, which could mean lower mortgage rates, too. Unfortunately, experts say that the decline in mortgage rates may be minimal.

"While mortgage rates are significantly lower than their historic high last fall, elevated rates are here to stay for a while," says David Bieri, an associate professor of economics and real estate at Virginia Tech. "With interest rate uncertainty still above more normal levels and prepayment risk much above what it was before the pandemic, rates are unlikely to fall more than an additional a quarter or half percentage point."

As of their most recent projections, Fannie Mae and the Mortgage Bankers Association both predict a 6.6% rate on 30-year mortgage loans by the end of the year. This is slightly lower than today's average.

The bottom line

A formal rate cut isn't necessary for mortgage rates to fall. Rates on mortgages even declined slightly in June, according to Freddie Mac, though they've since increased. 

"Mortgage rates have been far more reactive to economic data relative to Fed meetings because the members have been consistent and frequent with communication on policy direction, resulting in no surprise from their decisions," Saburi says. "We could see additional improvement if the Fed confirms at their meeting that inflation is cooling and hints at a rate cut in the fall." 

To get a lower mortgage rate when applying for your loan, boost your credit score and work on paying down your debts. Making a larger down payment can help reduce your rate, too.