The average prime 30-year fixed mortgage rate quoted on Zillow edged lower late last week – falling about 5 basis points from Tuesday to Friday – after the Federal Reserve increased short-term lending rates. Mortgage rates edged higher this week, rising to 3.8 percent by Wednesday afternoon, their highest level since late October.

Although the jump in interest rates this week coincided with the passage of tax reform legislation in Congress, the parameters of the reform have been widely known for at least a week and its effects were likely already priced into debt markets. More likely, markets reacted to strong new economic data: Home sales data posted a much stronger than expected November, providing yet further evidence that the U.S. economy is on strong footing.

GDP and inflation data due later this week will provide a further glimpse into the American economy, but market activity is likely to be light as investors and consumers begin to check out for the Christmas holiday weekend. There is a risk that small movements could be magnified due to light activity; historically the noise-to-signal ratio increases at this time of year.