Mortgage rates continued their steady march upward last week, reaching their highest levels since April.

Consumer confidence is improving and inflation expectations increasing with continued economic recovery, while jobless claims data showed further improvement in labor markets. Bond investors have priced in higher inflation expectations recently, nearing 3% vs. the Federal Reserve long-term target of 2%. Housing data shows persistent high demand for single family homes despite rates moving higher, helping keep supply tight as homes listed for sale are usually snatched up quickly. It is a busy upcoming week for economic data, with 3rd quarter GDP, jobless claims and Personal Consumption Expenditure releases. Markets will be scrutinizing this data for any indications of persistent inflation pressures and overall economic activity.

Rates could move considerably in either direction from here if this data diverges materially from expectations.