Last Week's Mortgage Rate Recap: Rates moved slightly higher 👎
Mortgage rates actually improved to start the week, before moving slightly higher on Friday. The moves may have been because of the huge Microsoft outage which affected trading, or could have just been due to a slight pullback in expectations for three Fed policy rate cuts by year's end. Either way, the moves were small.
This Week's Mortgage Rate Forecast: Rates likely to hold steady 👍
Despite the magnitude of President Biden announcing he will not run for reelection, his announcement has no real effect on mortgage rates. Although politics does play a role in markets and rates, mortgage rates continue to be most heavily influenced by the Fed and the possibility of coming rate cuts.
What's affecting rates this week:
- PCE inflation data: Coming on Friday, this is the Fed's favored gauge of inflation and is likely to show that inflation moved lower in June (like the CPI inflation report did). Mortgage rates may end the week slightly improved if that is the case.
- Expectations of Fed rate cuts: Markets currently expecting cuts to start in September (not the upcoming July meeting) and for there to be three cuts this year, helping mortgage rates remain steady unless that outlook changes.