Rates could be moving up!

On November 22, President Joe Biden announced the re-nomination of Federal Reserve Board Chairman Jerome Powell. Both said they are focused on fighting inflation.

What does a good inflation fight mean for markets and rates?

Typically, the Fed’s best weapon against inflation is to cool the economy by increasing policy rates. These rates don’t directly influence mortgage rates, but the end result will likely be the same.

Bond and mortgage markets began pushing mortgage rates higher immediately after the announcement.

Questions remain about how fast and how far the Fed will go with policy rate increases and the further tapering of mortgage bond purchases, which have helped keep rates at record lows since the spring of 2020.

But one thing is clear: for anyone looking to purchase or refinance a home, it may pay to act before rates rise further. Low rates equal lower payments or the ability to buy a more expensive home for the same payment. The opposite is true as rates rise.

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