Last Week's Mortgage Rate Recap: Rates improved
Mortgage rates drifted higher through the week, but reversed on Friday after Powell’s Jackson Hole speech boosted optimism of a September Fed rate cut after last month's weak labor market data led Powell to say a "shifting balance of risks may warrant adjusting our policy stance," helping rates end the week lower.
This Week's Mortgage Rate Forecast: Rates could creep higher
Mortgage rates aren’t likely to surge, but Friday’s improvements may be tough to extend. The initial optimism from Powell’s remarks is giving way to caution as investors weigh whether a September cut is a lock or just hopeful speculation. This could cause mortgage rates to creep up a bit through the week.
What’s affecting rates this week:
- Inflation: Powell's comments on Friday indicated a bigger concern about the weakness in the labor market over the threat of sticky inflation. That could change if Friday's PCE inflation data shows inflation is higher than expected.
- Fed expectations: Powell’s Jackson Hole comments boosted optimism, but if markets start doubting a September cut, rates could climb.
- Treasury yields: Yields remain near multi-month highs; if they push higher on strong data, mortgage rates will likely follow.