The prime 30-year fixed mortgage rate quoted on Zillow edged slightly higher mid-week last week. However, it remained in the 10-basis point range where it has been since the end of October.

Two economic developments contributed to the upward drift in mortgage rates:

First, passage of the Senate’s tax reform bill has markets anticipating larger fiscal deficits over the next decade, although details of the final bill have yet to be negotiated between lawmakers in the House and Senate.

Second, news broke late last week of two new appointments to vacant seats at the Federal Reserve. President Trump nominated Carnegie Mellon economist Marvin Goodfriend to the Federal Reserve Board of Governors and Thomas Barkin was named as the next president of the Richmond Fed. The Richmond Fed will hold a vote on the Federal Open Market Committee next year. Neither of these men has well-known monetary policy views, and both introduce new uncertainty to market expectations for the path of interest rates moving forward.

In the coming week, labor market data are likely to dominate headlines with November employment data due Friday. With the unemployment rate near generational lows and the Treasury yield curve flattening, there are rising concerns of a slowing U.S. economy – even as interest rates remain low. Incoming employment data will provide greater clarity on the state of the American labor market.