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Mortgage-rate volatility seen rising as oil falls and jobs data nears
Redfin says mortgage rates may stay jumpy as markets weigh the latest labor market reports and track where the Fed could go after its recent hold.
Mortgage rates could face increased volatility in the run-up to the first jobs-report week of the month, with Redfin pointing to a shift in rates last week and a busy calendar for labor and Fed signals. Redfin said rates drifted higher after a press conference by Fed Chair Warsh, and that mortgage rates, which are closely tied to longer-term Treasury yields, may keep moving as markets adjust their expectations. The outlet also highlighted that investors are looking beyond Warsh since he has refused to comment in detail on the reasons and mechanics behind policy actions, turning attention to other FOMC members. The week centers on Friday’s jobs report, along with other labor-market data on job openings, quits, and layoffs. Economists cited by Redfin expect a small increase in jobs created in July after a June disappointment, with the overall picture anticipated to show a firm labor market that is neither very tight nor very weak. Redfin also tied the near-term rate outlook to energy prices, noting oil is dropping on hopes of Iran peace talks, which could add another driver to market moves ahead of the jobs data. The outlet added that Wednesday’s Fed meeting left rates on hold, even though markets had been pricing about a 30% chance of a hike.