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Mortgage rates had a volatile week, but rates finished lower on Thursday. Fed Chairman Powell testified on Tuesday and Wednesday for Congress; his message is what the market expected—more Fed rate hikes. The Fed may raise rates higher than expected and expect rates to stay higher for longer. What was noteworthy is that there is a chance that the Fed will raise rates by 50 bps in their March meeting, something the market had not anticipated.

 

We saw a flight to security due to one or two regional banks facing solvency concerns. This is what brought down mortgage rates for the week. Looking at if we can move lower from here in rates, it is based upon inflation and the labor market. Those are likely the main drivers, but with rates as high as they are, we may see more one-off scenarios, such as a regional bank seeing solvency issues, that can help rates move lower.

 

• Mortgage Applications rose 7.4% this week

• U.S. 10-year Treasury closed at 3.90% on Thursday afternoon

• Factory Orders came in above analyst's expectations (-1.6% m/m vs expectations of -1.8% m/m)

• Wholesale Inventories came in-line with analyst's expectations (-0.4% m/m)

• ADP Employment Change came in above analyst's expectations (242k jobs vs expectations of 200k)

• JOLTS Job Openings came in above analyst's expectations (10.824 million openings vs expectations of 10.546 million openings)

• Initial Jobless Claims came in above analyst's expectations (211k claims vs 195k claims)