Mortgage Rates Stay Flat as Investors Wait on Fed
Mortgage rates were flat this week as investors stood pat, waiting for more signs dictating the economy’s path forward and potential key decisions made by the Federal Reserve.
Mortgage rates have spent most of August rising modestly from half-year lows, as a strong jobs report, elevated inflation, and signs that the Federal Reserve have become more likely to tighten monetary policy nudged rates upward. But those upward movements halted this week, partly due to the fact that these recent developments were priced into investors’ outlooks. The pause in mortgage rate increases were also likely the result of more data releases that point to a weakening economic outlook. Big misses in consumer sentiment and retail sales suggest that rising COVID cases are hindering some economic activity. Importantly, these figures were released after the Federal Reserve last met and issued an official statement, so investors are anxiously awaiting signals for how or whether these reports could cause the Fed to rethink their perceived plans to tighten monetary policy by the end of the year.
Fed Chair Powell is due to issue a statement at next week’s Economic Policy Symposium in Jackson Hole, Wyoming, so barring any unforeseen economic or pandemic-related developments, it’s unlikely that we’ll see a meaningful move in mortgage rates until then.
