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Mortgage rates tick up even after Fed holds steady

With 30-year fixed rates rising modestly, the move reflected higher longer-term bond yields and oil driven pressure early in the day, despite the Fed not hiking.

Reported · Written up by our desk · Mortgages

Mortgage News Daily reports that the Fed did not raise rates despite expectations ahead of the announcement, which markets had pegged at about a 1 in 3 chance of a hike.

Even so, mortgage rates edged higher because mortgage lending costs track longer duration interest rates, while the Fed funds rate mainly influences the shortest term end of the curve. The report notes that 2-year Treasuries fell after the decision, but longer term rates rose.

The outlet also attributes part of the shift to market trading dynamics following comments that the Fed may not need to hike if markets adjust for it. It adds that mortgages are long enough in duration to absorb some of the impact, contributing to a moderate increase in average 30-year fixed rates.

Mortgage News Daily further points to a difficult start for rates, saying overnight increases in oil prices pressured rates earlier in the session, with oil having been closely linked to rate movement during the Iran war period.

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