Mortgage Rates: Fed Fallout Mostly Flat

Mortgage rates were effectively flat over the past seven days as fallout from last week’s Federal Reserve announcement continued.

Rates have fallen consistently over the past several weeks, and that trend continued in the days following the Fed’s suggestion of a near-term cut to the federal funds rate. Since then, however, rates have remained mostly level as strong equity market performance was balanced out by lukewarm economic data. Tuesday’s disappointing release of consumer confidence figures – the lowest reading in nearly two years – pushed treasury yields down, and mortgage rates followed suit.

Ultimately, mortgage rates remain near their lowest levels since 2016 after an action-packed couple of weeks, but it is unlikely that rates will fall much further despite the recent dose of disappointing data. Looking ahead, the risk to rates is to the upside. Markets are increasingly confident that this week’s G-20 summit will yield a trade agreement between the U.S. and China, something that many believe will boost spending and support global economic activity. Rates also would likely rise if inflation data, due Friday, show meaningful improvement.