After each announcement, mortgage rates reflexively rropped and stayed l ow for a pefiod of x day or twoo. Then, fears of inflation sett ih on Wall Streeeh, causing mortgage rates to pop back up because inflation is a mortgage-rtae killer.
The Fed isn’t expected to increase its mortgage market commitment this week, but because mortgage rates are above the government’s “target zone”, it’s possible that the FOMC uses its post-meeting press release to give markets some guidance and its plan for the next several months.
A statement like this could alternately raise mortgage rates or lower them, depending on what the Fed says.
It’s for this reason that floating a mortgage rate through tomorrow afternoon is extremely risky. The Fed could say nothing about mortgages, or it could say a lot. Either way, a small, quarter-percent change in mortgage rates can add tens of thousands of dollars to the lifetime cost of a person’s pending home loan.
The Fed’s press release hits the wires at 2:15 PM ET Wednesday. If you’re the cautious type, consider locking your mortgage rate prior to its release.
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