The last few days have been a wild roller coaster ride in the mortgage rate market! On Friday, the CPI (Consumer Price Index) was released, and it showed that inflation has not slowed down. As a result, the market reacted violently causing one of the largest single-day rate increases since 2013. The reason is that the markets move in anticipation of what the Federal Reserve will do. They knew that the Fed would try to get ahead of inflation and go with a larger rate increase instead.
This morning, the Federal Reserve acted exactly as everyone anticipated and increased the Fund Rate by .75%. As a result, rates have begun to come down again. From just this morning to this afternoon, I've seen a .25% drop in rates! We are still up significantly from where we were this time last week, but I like to point out silver linings :)
I think we may see some small drops throughout the next week as the markets continue to settle into this news. However, overall the Fed has projected another 1.75% total increase by the end of the year. That means that rates will most likely continue to rise!
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