Mortgage rates continued to rise last week, exceeding 6.00% for the first time since 2008.
On the heels of a much higher than expected increase in consumer prices the week prior, The Federal Reserve took strong action and increased their target for the Fed Funds Rate by 0.75%. Comments from the Fed also indicated that they are committed to returning inflation to a long-run target of 2%, even if that risks a recession. New housing starts are slowing down, likely from a combination of ongoing supply chain issues and softening demand given higher mortgage rates.
With light economic data releases this week, markets will be focused on comments from Fed officials and Chair Powell’s testimony to the Senate Banking Committee and House Financial Services Committee to understand the Federal Reserve’s commitment to taming inflation as well as its view on recessionary pressures from increasing rates.