Managing Editor, National Mortgage Professional
Markets overwhelmingly expect a quarter-point hike, but the Fed’s projections and the bond market’s response may matter more to originators
The Federal Reserve is widely expected to raise interest rates Wednesday after hotter August inflation abruptly reversed economists’ forecasts. For mortgage professionals, however, the expected quarter-point hike may not be the most important part of the announcement.
Markets have already priced in a high probability of a rate hike. The bigger questions for mortgage rates are what Fed officials project for the remainder of the year, how Chair Kevin Warsh characterizes the inflation outlook, and whether the decision reassures or unsettles the long-term bond market.
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