The Federal Reserve increased their benchmark interest rate by .50% yesterday. So, does that mean today mortgage rates are .50% higher. It does not. In fact, some lenders interest rates even dropped by 1/8% after the Fed move. Why is this?
Well, it was no surprise that the Fed was going to raise their rate yesterday. And most, if not all, experts agreed they would raise it by .50%. The Fed could have not raised the rate or raised it by any amount they chose to. However, because they raised the rate by what everyone expected, there was not movement in mortgage rates. You see, mortgage rates and the bond market had already moved way ahead of what the Fed actually did yesterday. Rates over the last month have been tricking down, partially due to the fact that reports show that inflation is getting better. And with inflation tempering, that means the Fed would not have to raise rates so aggressively as they had in the past. The Fed for the last month has indicated they would only raise their rate .50% because of moderating inflation. That moved mortgage rates downward over the last month. And then yesterday there were no surprises. So no affect on mortgage rates.
Fingers crossed inflation continues to be checked and get under control. That should mean lower mortgage rates in the future.