For the week of February 13, 2023

Recap of last week: Rates moved higher

Mortgage rates moved higher last week because market sentiment shifted towards more Fed rate hikes to come and the Fed rate possibly peaking at 5.25%. This shift in sentiment was triggered from this month's jobs data and made worse from positive economic data and Fed speakers who talked about raising rates to fight inflation.

Mortgage Rate Forecast: Rates will be volatile

This week we don't know which way rates will move, but we know they will move in reaction to Tuesday's CPI consumer inflation data. Depending on this report, we could see rates continue to creep higher this week or possibly improve slightly.

What's affecting rates this week:
- Inflation: If Tuesday's CPI consumer inflation report shows that inflation continues to come down it could help stabilize rates. However, if markets don't like the data, it could cause concerns that inflation is back on the rise and that the Fed will have to be more aggressive in fighting inflation at upcoming meetings, and will push mortgage rates up.
- The Fed: Mortgage rates react to anticipated Fed moves, rather than actual Fed moves. Markets are now pricing in more hikes before the Fed stops hiking its policy rate, pushing mortgage rates higher.