Mortgage Rates Lower as Market Digests Fed

Posted To: Mortgage Rate Watch

Mortgage Rates made more substantial gains today, after financial markets had more time to react to yesterday's announcement from the Federal Reserve. Although the Fed held its policy rate steady, the bigger story was a sharp downgrade in the longer term rate outlook. In short, the Fed sees interest rates remaining "lower for longer." They increasingly confirm this stance with their updated forecasts. Although mortgage rates don't directly follow the Fed Funds rate, they are sensitive to changes in the expected path of the Fed's rate. With the Fed downgrading its rate hike expectations, mortgage rates have fallen. We likely would have seen more of a move yesterday, but with the Fed announcement happening in the afternoon, it doesn't leave as much time for lenders to react. Today's gains are...(read more)

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