Fed seen holding rates, shaping Home Depot housing and remodeling demand

On June 26, 78 of 102 economists expected the Federal Reserve to keep its benchmark rate unchanged through the end of 2026, even as financial markets were still leaning toward more hikes. On June 9, 72 of 102 economists expected the Fed to hold at 3.50% to 3.75% at its June meeting, which it did, with inflation above 4%, solid growth and a labor market that still looked relatively healthy.

For Home Depot workers, that kind of higher-for-longer backdrop matters less as a Wall Street trade and more as a slow-moving filter on demand. Richard McPhail, Home Depot’s chief financial officer, tied housing turnover to consumer spending linked to a home sale and called the housing market “frozen” for a long time in June. Turnover has stayed at historical lows since 2023, keeping projects and purchases linked to buying and selling a home under pressure.

When rates stay elevated, fewer homeowners refinance, move or borrow cheaply for large remodels, while repair and maintenance work tends to hold up better. Customers are more likely to compare prices, stretch projects across multiple trips and focus on incremental fixes instead of big-ticket renovations. On the floor, that puts more weight on tradeoffs, lead times and financing conversations. For department leads and store managers, traffic planning, conversion, attachment and service execution matter more.

On May 19, Home Depot posted first-quarter fiscal 2026 sales of $41.8 billion, up 4.8% from a year earlier, with comparable sales up 0.6% and U.S. comparable sales up 0.4%. Home Depot also reaffirmed its fiscal 2026 guidance that day. The company has tied any broader recovery to renewed housing activity and the pent-up demand that can follow once turnover finally loosens.