Mortgage rates

Averages rose sharply across the board, as investors focus on the central bank's response to ongoing economic and geopolitical developments.

It was the highest percentage reached in almost three years.

The increase is the first since 2018 and, combined with reductions in the mortgage and Treasury bond portfolio, it could drive 30-year home loan rates to 4.5% by year-end.

The Federal Open Market Committee is all but certain to raise rates by a quarter percentage point at the conclusion of its two-day policy meeting.

Executives speak on the uncertainty created by the Russia-Ukraine war and Federal Reserve announcements.

The surging volatility in the world’s biggest bond market is challenging traders trying to play both tighter global monetary policy and a war-induced commodity price shock that’s raising the specter of 1970s-style stagflation.

In addition to the Russia-Ukraine conflict, persistent inflationary pressures and expected monetary policy moves are contributing to volatility.

A quarter-percent increase would eliminate more than a million buyers for median-priced homes according to the National Association of Home Builders.

After a tumultuous week of big yield swings and heightened volatility in the U.S. Treasury market, investors are bracing for another hot inflation report, while the war in Ukraine increasingly casts a pall over Europe and the global economy.

The Ukraine-Russia conflict has caused volatility in mortgage rates and that is likely to attract more buyers into a tight housing market, the analysis found.

The effect of the conflict and upcoming Fed announcements have left much of the industry guessing about what happens next.

The Federal Reserve Chair Jerome Powell said the central bank expects to raise interest rates later this month to tackle hot inflation amid a tight labor market while Russia’s invasion of Ukraine has added uncertainty.

Optimal Blue researchers found correlations of 75% or more when looking at numbers of different loan-size cohorts, but the percentages came in lower when state data was analyzed.

Strong economic data was countered by international political developments, sending the 30-year rate lower for the first time in a month.

Federal Reserve Governor Michelle Bowman suggested that a half percentage-point increase in interest rates could be on the table next month if incoming readings on inflation come in too high.

The 30-year average increased by 23 basis points on inflation, geopolitical news.

Minutes of the Jan. 25-26 Federal Open Market Committee meeting, released Wednesday, “[tell] us that they will raise the fed funds rate in March, and that a 50 basis point rate hike is in play,” said Gus Faucher, chief economist for PNC Financial Services Group.

Federal Reserve Bank of St. Louis President James Bullard said he supports raising interest rates by a full percentage point by the start of July — including the first half-point hike since 2000 — in response to the hottest inflation in four decades.

Inflation data showing a 7.5% increase in consumer prices will likely lead to Federal Reserve moves that apply continued upward pressure.

But the current lack of movement is likely only a temporary reprieve, according to Freddie Mac.