Strong Economy, Tax Cut News Push Mortgage Rates to Highest Levels in Weeks

Mortgage rates rode strong manufacturing data and news of potential tax cuts to their second straight week of gradual gains, reaching their highest levels in almost a month.

The strength of the economy was reinforced Tuesday when key manufacturing data greatly exceeded analysts’ expectations and showed that, despite uncertainty surrounding trade policy, American manufacturing is growing at its strongest rate in 14 years.

Rates were also boosted on Wednesday when House Republicans confirmed that they are indeed planning on proceeding with a second phase of tax cuts later this month, refuting a previous report.

Several high-profile Fed speeches are scheduled for later this week, and markets will be keeping a close eye for any deviations from Chairman Jerome Powell’s statements made at the Jackson Hole conference last month. Markets are also likely to focus on the release of monthly jobs data for August, scheduled for Friday. Last month’s release fell short of expectations, but strong employment gains or wage growth would likely result in further upward pressure on mortgage rates.