Mortgage rates continued higher following the release of the Minutes from the Federal Reserve’s (aka “The Fed”) most recent policy meeting.
The Fed was slightly more upbeat than markets expected, saying that most members agreed that a stronger economy increased the likelihood of further rate hikes. Although the Fed Funds Rate doesn’t directly dictate mortgage rates, there is plenty of long-term correlation. Because the Fed only meets 8 times a year to adjust rates (and rarely adjusts rates on all 8 occasions), bond markets (which include mortgage rates) are constantly adjusting to what the Fed will probably do in the future.
Of course, it could be argued that both the Fed AND financial markets are simply adjusting to the state of the economy, inflation, etc., but that’s more of a philosophical discussion (chicken vs egg type stuff). What’s important is that financial markets saw a reason for the recent trend in rates to continue. Unfortunately, today that meant rates moved to their highest levels in more than 4 years. For what it’s worth, today’s rates are only microscopically higher than last week’s highs.