Mortgage rates continued to increase last week, reaching their highest levels since March of 2020.

Economic indicators showed that labor markets remain tight, while consumer and producer prices continued to rise in December. This data supports market expectations that the Federal Reserve will begin to move early in 2022 to address inflation, and potentially accelerate asset purchase tapering and balance sheet runoff. Jobless claims data later this week will provide more insight on the state of labor markets.

Next week markets will be focused on the Federal Open Market Committee (FOMC) meeting and additional data releases on GDP and inflation measures that could impact the direction of rates going forward.