More Bad News for Mortgage Interest Rates

Just when you think the Federal Reserve recognizes that they should slow the excessive rhetoric of rapidly raising the Fed Funds Rate to give the prior rate hikes a moment to catch up, they boldly remind the markets that they will not be deterred from their path of a restrictive market until they see inflation close to the 2% target.

In comments, members state that they are mandated to balance the labor market and inflation here in the USA, and will not consider the impact to housing, the stock market or other nations’ economies In setting policy. As a result, stocks are down sharply and interest rates are spiking higher. This whipsaw in mortgage interest rates is not a good sign for longer-term stability and could lead to a more dramatic move higher.

In other inflation news of the morning, OPEC announced they would be cutting oil production by 2,000,000 barrels per day. This is a kick in the face to all nations who are battling inflation and fighting for stability in their economies. OPEC is not liking the recent drop in oil prices and looking to boost profits and increase demand for oil.

With oil prices being a big contributor to the delivery of goods and many services, this will increase the cost retailers and service providers pay which will ultimately drive up consumer prices even higher.

With the massive volatility in the mortgage bond market, the safe play is to lock. Let’s hope bond prices find true stability soon.