Parliament Shrunkadelic: Mortgage Rates Skid on Rejected Brexit Deal

Mortgage rates fell this week to their lowest levels in over a year as geopolitical headlines and weak economic data dampened growth expectations and boosted demand for safer assets.

Last week saw rates climb markedly for two consecutive days before abruptly reversing course as optimism surrounding U.S.-China trade discussions began to waver. That trend continued this week: Rates retreated as markets continued to grapple with an uncertain economic outlook, both at home and abroad.

Brexit took center stage this week, and for a moment markets appeared hopeful that a compromise deal between Britain and the European Union could be met. However, Tuesday’s vote on a proposed agreement was rejected, and rates moved lower as a result.

Economic data, particularly U.S. inflation figures released Tuesday, also contributed to declining rates. Consumer price levels – one of the main indicators Fed officials are watching to evaluate the health of the U.S. economy – increased in February, but at a pace that fell short of analysts’ expectations. This, coming on the heels of Friday’s disappointing employment report, pushed rates downward and offered markets more evidence that the Federal Reserve will maintain its ”patient” approach to rate increases at next week’s Federal Open Market Committee meeting.

While other, less impactful economic releases have shown positive signs and paint the U.S. economy as on stable footing, until the global economic uncertainty clears up, sharp increases to mortgage rates remain unlikely.