Last Week's Mortgage Rate Recap: Rates moved higher
Rates moved slightly higher last week when strong economic and labor data made it less likely the Fed will need to cut rates until later in the year, and will likely cut rates less than the three times that was recently projected at the last Fed meeting.
This Week's Mortgage Rate Forecast: Rates may get worse
Rates are more likely to creep higher this week, especially if the inflation data is disappointing, as markets adjust to the idea that the Fed may hold off on any rate cuts until much later in the year.
What's affecting rates this week:
- Economic data: This week brings important inflation data, which is not likely to be too helpful to mortgage rates. Although economists are projecting a small improvement in inflation, it would take a surprisingly low reading to help rates to rally, and that is unlikely to happen.
- The Fed: Markets are starting to bet on only two Fed rate cuts this year as Fed officials continue to say that the strong economy and labor market along with stubborn inflation make it too early to even consider cutting rates. The Fed will only need to consider cutting rates if we see signs of a weakening economy and a softening labor market that needs stimulus.