Mortgage rates rose slightly last week.

Rates spiked in the middle of last week after the Federal Reserve communicated a willingness to take aggressive measures to address inflation. But then rates fell at the end of the week to end only marginally higher. The latest surge in COVID cases is expected to slow economic activity in the short term, and even though fourth quarter GDP growth was strong, much of that was driven by increasing inventories. Expectations continue to be for the Federal Reserve to begin raising the Fed Funds rate in March. Markets will be focused on payroll data coming later this week for signals on the state of the labor market and the Institute for Supply Management (ISM) survey for readings on economic activity.

The economic data, along with any developments in the situation in Ukraine, could create additional volatility in interest rates.