Mortgage Rates Rise as Fed Points Toward Tapering

Mortgage rates steadily increased this week, ending the week moderately higher.

The September jobs report, released last Friday, was generally viewed as 'meeting the bar' for the Federal Reserve to begin tapering asset purchases. Minutes from the September Federal Open Market Committee (FOMC) continue to point toward tapering starting at the end of the year, in line with current market expectations, which may jolt rates higher entering the new year. The report also indicated tightness in labor markets, and with ongoing supply chain issues and increasing energy prices, market expectations are factoring in inflationary pressures in the near term. Additionally, progress made on the debt ceiling, calmed markets somewhat and therefore kept rates steady – at least until discussions re-start in December.

Economic data coming later this week – such as the Producer Price Index and Retail Sales – will provide additional signals on inflation and economic recovery, both of which may have an impact on rates in the coming week.