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Mortgage Rates Spike in Response to Fed
Mortgage News Daily • • business
Key Points:
- Mortgage rates reversed earlier gains following the Federal Reserve's announcement and press conference, with rates rising sharply in the afternoon.
- The Summary of Economic Projections (SEP), particularly the dot plot, indicated that Fed members now expect the Fed Funds Rate to be at least 0.25% higher by the end of 2026 compared to March, triggering initial bond market declines.
- Bonds weakened further during Fed Chair Kevin Warsh's press conference, possibly due to traders' disappointment over the lack of clear guidance and a less rate-friendly tone than anticipated.
- The decline in bond prices led mortgage lenders to increase rates, with some raising rates up to three times, pushing the average 30-year fixed mortgage rate back to levels last seen on June 10th at 6.62%.
