Mortgage Rates Steady as Markets Await Fed Announcement

Mortgage rates ended the week flat, remaining near their lowest levels in more than a year as some uncertainty surrounding trade tensions appeared to ease.

The near-zero net change does not do justice to the bumpy ride rates took over the past seven days. Friday’s underwhelming jobs report sent rates skidding lower, continuing their weeks-long downward trajectory toward long-term lows. But Monday’s news that tariffs on goods imported from Mexico would not go through as planned nudged bond yields back upwards and mortgage rates followed suit, a trend that continued through Tuesday.

This rebound was modest, however, as bond markets remain attuned to the fact that mounting risks to the global economic outlook – specifically, enduring trade tensions between China and the U.S., Brexit and low expectations for the pace of inflation – may motivate the Federal Reserve to cut the federal funds rate at least once this calendar year.

As a result, it’s unlikely that major rate movements will occur ahead of next week’s Federal Open Market Committee meeting, although Friday’s retail sales data release could move the market if it shows surprising results.