Mortgage Rates Increase Significantly Amid Predictions of Even Greater Hikes

Mortgage rates increased significantly last week.

Markets are anticipating more aggressive actions by the Federal Reserve, based on comments from many officials after the March Federal Open Market Committee meeting. Consensus is now predicting several 50 basis point hikes to the federal funds rate this year, which will lead to further upward pressure on mortgage rates. Jobless claims fell to a 50-year low last week, pointing to continued labor market pressures. With strong economic data releases last week, investors may be taking a view that the economy can withstand more aggressive Fed action before any recessionary pressures would slow down rate hikes.

Markets will be focused on inflation and employment data later this week for further signals of how rate increases are affecting the economy, and how much it can withstand without dipping into a recession.