Mortgage Rates Rebound to Four-Year Highs
After falling during the previous week for the first time this year, mortgage rates rebounded over the past week, marching steadily higher by about 8 basis points to 4.31 percent. Rates are now matching the 4-year highs reported in late February and early March.
The most important development this week was the Federal Open Market Committee’s announcement earlier today that it is increasing its benchmark short-term interest rates. It was the first FOMC statement since new Chair Jerome Powell assumed leadership at the Fed in mid-February.
In addition to the statement, the Fed released its quarterly projections, and they suggest a slightly faster pace of rate hikes over the next two years than had been anticipated. However, much of today’s Fed news was already priced into markets. Mortgage rates were steady after the announcement.
Beyond Fed news, other factors pushing rates upward over the past week included firming inflation data, rising oil prices – which should boost inflation moving forward — and the prospect of a new round of fiscal stimulus.
Over the next week, there are mostly second-tier data scheduled for release, including consumer confidence and revisions to GDP. None of these is likely to move markets unless they dramatically miss expectations.
