Mortgage rates recover slightly ahead of Federal Reserve Day

Mortgage rates fell slightly today after rising in the past two days of trading. The average lender remains in his low 7% range in his 30-year fixed scenario of the top conventional.

The back and forth consolidation over the past few days speaks to broader financial markets finding seats before tomorrow’s big show. At 2:00 PM ET, you will receive the latest policy update from the Fed. what is at stake?

We already know the Fed will raise rates to 0.75%. The market has already moved to a position for that and if that happens it will not be a reason for interest rate movement.

So why care about Federal Reserve Day?

In addition to the rate hike itself, the Fed has written several paragraphs in its official statement. The text of the statement will be scrutinized for clues and clear promises about the course of future policy change. Thirty minutes after his announcement, Fed Chairman Powell will hold a press conference where he can comment on the same topic.

It’s these wording changes and Q&A clarifications that the market is interested in. Even a small change in the Fed’s rate hike outlook (again, not tomorrow, but at its later meeting) could have a large impact on interest rate behavior in the short term.

There are many expectations surrounding this meeting that the Fed will signal that rate hikes are coming to an end. If they go as far as putting that bone in the market, it will be good for interest rates at first. If they avoid it altogether (or worse… use the opportunity to remind the market that rates can still be quite high if inflation doesn’t turn out as planned), interest rates will have a negative impact tomorrow afternoon. Volatility risk is high in any case.

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