After dipping by about 10 basis points in the middle of last week, mortgage rates recovered all of that drop and are now in line with where they stood a week ago, just shy of four-year highs. The average prime 30-year fixed mortgage rate quoted on Zillow stood at 4.29 percent on Wednesday.
Incoming economic news and Federal Reserve expectations have dominated market headlines in recent news cycles, but political/geopolitical developments once again seized markets’ attention this week. Growing uncertainty about the direction of U.S. trade policy has pushed up the near-term risks to the American economy. Abroad, the results of elections in Italy raise risks to the European economic outlook.
To be clear, Fed news was still in the background: In testimony to the Senate Banking Committee on Thursday, Fed Chair Jerome Powell moderated comments made earlier in the week implying a faster pace of interest rate hikes than had been expected, but Fed Gov. Lael Brainard gave a speech echoing Powell’s initial comments. In addition, reports of the likely candidates to fill the Fed’s currently open Vice Chair role point to a more hawkish tilt to the Federal Open Market Committee.
The main economic news due this week is Friday’s monthly jobs report. Absent a major disappointment, geopolitical news is likely to continue dominating the headlines.
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