The shockingly swift increase in mortgage rates continued this week, reaching the highest levels since early 2019. The cause is clear. Inflation has climbed to the highest levels in decades, and the Fed has started to tighten monetary policy to bring inflation back down. After indicating for months that they must fight inflation by reversing the extremely accommodative policy measures …
Fed Tightens
While investors continued to keep a close eye on the conflict in Ukraine this week, the primary influence on mortgage markets was growing concern about rising inflation and its effect on future Fed policy. At its meeting on Wednesday, the Fed indicated that it plans to tighten monetary policy more than expected, and mortgage rates ended the week higher. Fed …
Rising Inflation
Headlines about the conflict in Ukraine continued to cause volatility in mortgage markets this week, but their net impact was roughly neutral. Instead, the primary influence was growing concern about rising inflation, and mortgage rates ended the week higher. The Consumer Price Index (CPI) is a closely watched inflation indicator that looks at price changes for a broad range of …
Ukraine, Fed, and Labor Market
It was another volatile week for mortgage markets, mostly due to the steady stream of headlines about the intensifying conflict in Ukraine. Key testimony from Fed Chair Powell and important labor market data had a much smaller impact. As a result, mortgage rates ended the week lower. In response to geopolitical events such as the conflict in Ukraine, investors generally …
Higher Inflation
It was another volatile week for mortgage markets, mostly due to the events in Ukraine. The daily movements were offsetting, however, and mortgage rates ended the week with little change. Headlines about Ukraine continued to influence mortgage rates this week, especially the invasion on Thursday. When tensions increased, investors reduced risk by shifting from stocks to relatively safer assets such …
Consumer Spending Surges
It was a volatile week for mortgage markets, mostly due to shifting expectations for Russian military action in Ukraine. The daily movements were offsetting, however, and mortgage rates ended the week with little change, remaining at the highest levels since the middle of 2019. In response to geopolitical events such as a possible Russian invasion of Ukraine, investors generally seek …
Inflation Surges
Investors have been on edge about higher inflation for months, and on Thursday they were hit with a powerful one-two combination that left them stunned. First, the CPI inflation report was even stronger than expected, and then a Fed official proposed a very rapid pace of rate hikes to bring down inflation. As a result, mortgage rates climbed to the …
Enormous Job Gains
The key events this week, stronger than expected labor market data and major central bank meetings in Europe, were negative for mortgage rates. As a result, rates climbed to the highest levels since early 2020. The closely watched Employment report released on Friday exceeded expectations in nearly every area. Against a consensus forecast of 150,000, the economy gained 467,000 jobs …
Fed Will Tighten Soon
The key event this week was the Fed meeting on Wednesday, and it caused investors to anticipate a faster pace of monetary policy tightening, which was negative for mortgage rates. The major inflation and economic growth data had little impact. As a result, rates climbed a bit to the highest levels since early 2020. As expected, the meeting statement indicated …
Strong Year for Home Sales
With no major economic news, the investor outlook for growth and inflation remained the same this week. Mortgage markets experienced some daily volatility, but rates ended the week with little change. After three strong months, sales of existing homes unexpectedly dipped in December, falling 5% from November. However, sales for all of 2021 still were 8.5% higher than in 2020, …