For the week of August 29, 2022
Recap of last week: Rates moved higher
Average mortgage rates once again moved higher last week, although only slightly, as the PCE inflation data showed prices eased in July. However, comments by Fed Chair Jerome Powell from the Jackson Hole symposium pushed rates up a bit. Powell said the Fed will continue to raise policy rates to combat inflation, despite expectations that it will slow the economy and cause a recession.
Mortgage Rate Forecast: Rates could improve, BUT...
Mortgage rates could improve this week, as talk of a slowing economy and a falling stock market fuels fears of a coming recession. However, we could still be a week away from improvement if bond prices start to slip this week as investors panic, pressuring rates higher instead.
What's affecting rates this week:
- Economic data: The big report this week will be jobs data on Friday, which could cause rates to move. A strong report could hurt rates, while a weaker report will help. There are also some manufacturing reports and a consumer confidence reading that will have a much lesser effect on rates but will play a role.
- Labor Day: Markets will be closed on Monday, and markets will likely be quiet on Friday after the jobs data as investors take off for a long weekend.