Mortgage rates spent another week moving in a relatively tight range. The minutes from the Fed's most recent meeting were released last week. The comments made it fairly clear that the Fed is done lowering rates. Most analysts now expect the Fed's next move to be an interest rate increase. There is an expectation that this latest round of rate cuts, and all of the government's effort to stimulate the economy, will soon begin to produce additional economic growth. With the inflationary pressures already existing in the market, any additional growth would likely spawn some additional price pressures. This would force the Fed to begin increasing rates. However, this scenario may not happen in the near term. We may spend the summer waiting for some clear economic direction.
This week does contain some significant data. We'll get our first glimpse at the 1st quarter's GDP. If it falls in line with expectations, at just under 1.0%, mortgage rates may stay fairly flat. However, a surprise spike could prod traders into worrying about that future rate hike, with rates moving upward.
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