For the week of February 14, 2022
Recap of last week: Rates continuing to worsen
Mortgage rates last week moved higher as inflation reports showed inflation surged 7.5% in January, even higher than expected and the highest increase in almost 40 years. Expectations that the Fed will have to take stronger measures to get inflation under control pressured mortgage rates higher on the week.
Mortgage Rate Forecast: Rates likely to continue higher
Mortgage rates are likely to continue higher this week and in coming weeks ahead of the next Fed meeting in March, as markets prepare for the Fed to raise policy rates faster than originally forecast. Although the Fed doesn't directly control mortgage rates, rates generally move higher as markets prepare for the Fed to hike policy rates.
What's affecting rates this week:
- The Fed: Expectations the Fed will raise policy rates at March's meeting by half a percent rather than a quarter percent, are pushing mortgage rates higher.
- Fed meeting minutes: Minutes from last month's Fed meeting will come out on Wednesday, and could pressure mortgage rates higher if they support a larger Fed rate hike in March.
- Russia/Ukraine: Concerns that Russia will invade the Ukraine are causing stocks to suffer, and could help mortgage rates slightly.
