In testimony before Congress, Fed Chair Powell cautioned that the causes of the recent rise in inflation may last longer than anticipated. Inflation could pressure rates higher.

The economy expanded at a 6.7% annual pace in the 2nd qtr despite a resurgence of COVID-19, a slight increase over earlier growth estimates.

Initial jobless claims rose for the 3rd straight week. However, unadjusted claims, which economists say offer a better gauge of the labor market, fell slightly last week.

Home prices climbed to a new record in July, as buyers continued to compete fiercely amid a shortage of homes for sale. There are signs the market frenzy might be easing.

Following 2 months of declines, pending home sales surged more than expected in August. Sales increased 8.1% over July but were still down 8.3% from last year.

Mortgage rates started to rise last week. Refinance and purchase applications both fell 1% from the previous week.